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Cited by 677

The DOI matches its Crossref record; 19 of the 19 references it cites were found in a registry or an index.

Equity, Bonds, and Bank Debt: Capital Structure and Financial Market Equilibrium under Asymmetric Information

Open access
Bolton, Patrick, Freixas, Xavier·2000·Journal of Political Economy
DOI 10.1086/262121
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Abstract

This paper proposes a model of financial markets and corporate finance, with asymmetric information and no taxes, where equity issues, bank debt, and bond financing coexist in equilibrium. The relationship banking aspect of financial intermediation is emphasized: firms turn to banks as a source of investment mainly because banks are good at helping them through times of financial distress. This financial flexibility is costly since banks face costs of capital themselves (which they attempt to minimize through securitization). To avoid this intermediation cost, firms may turn to bond or equity financing, but bonds imply an inefficient liquidation cost and equity an informational dilution cost. We show that in equilib‐rium the riskier firms prefer bank loans, the safer ones tap the bond markets, and the ones in between prefer to issue both equity and bonds. This segmentation is broadly consistent with stylized facts.

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Metadata

Authors
Bolton, P., & Freixas, X.
Venue
Journal of Political Economy
Publisher
University of Chicago Press
Published
2000-04
Volume
108
Issue
2
Pages
324-351
ISSN
  • 0022-3808 (ISSN-L)
  • 1537-534X
DOI
10.1086/262121
OpenAlex
W2167623534
Cited by
677
References
19
FWCI
136.82
Type
journal article
Language
en
Open access
green

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CoChat. (2026). Citation check: Equity, Bonds, and Bank Debt: Capital Structure and Financial Market Equilibrium under Asymmetric Information. https://app.cochat.ai/papers/10.1086/262121
The paper
Bolton, P., & Freixas, X. (2000). Equity, Bonds, and Bank Debt: Capital Structure and Financial Market Equilibrium under Asymmetric Information. Journal of Political Economy. https://doi.org/10.1086/262121

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Bibliographic data: Semantic Scholar, OpenAlex, Crossref.

Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.