The DOI matches its Crossref record; 1 of the 1 references it cites were found in a registry or an index.
Bank Information Monopolies and the Mix of Private and Public Debt Claims
Abstract
This article examines the determinants of the mix of private and public debt using detailed information on the debt structure of 250 publicly traded corporations from 1980 through 1990. We find that the relationship between bank borrowing and the importance of growth opportunities depends on the number of banks the firm uses and whether the firm has public debt outstanding. For firms with a single bank relationship, the reliance on bank debt is negatively related to the importance of growth opportunities. In contrast, among firms borrowing from multiple banks, the relationship is positive.
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Even large firms may engage in informationally opaque activities that require the information production services of a financial intermediary that can structure a tailored contract and monitor performance over the life of the contract.
“Arguably, even large ®rms may engage in informationally opaque activities that require the information production services of a ®nancial intermediary that can structure a tailored contract and monitor performance over the life of the contract (Carey et al., 1993;Houston and James, 1996;Hadlock and James, 1997).”
From The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle (1998) · cites this paper as Houston and James, 1996
Firms with access to public debt markets may try to reduce the control of their banks by issuing public debt, even though public debt may entail higher costs.
“Some research suggests that these ®rms may try to reduce the control of their banks by issuing public debt, even though public debt may entail higher costs (Diamond, 1991(Diamond, , 1993;;Rajan, 1992;Houston and James, 1996).”
From The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle (1998) · cites this paper as Houston and James, 1996
Citations
Cites
Financial intermediation and delegated monitoring
Diamond, D. W. (1984) · The Review of Economic Studies · doi:10.2307/2297430 · Cited by 8,476
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Cited by
Sorted by citations
N. Berger, A., & F. Udell, G. (1998) · Journal of Banking & Finance · doi:10.1016/s0378-4266(98)00038-7 · Cited by 3,690
“Some research suggests that these firms may try to reduce the control of their banks by issuing public debt, even though public debt may entail higher costs (Diamond 1991, 1993, Rajan 1992, Houston and James 1996).”
Environmental externalities and cost of capital
Chava, S. (2014) · Management Science · doi:10.1287/mnsc.2013.1863 · Cited by 1,851
Arm’s Length Financing and Innovation: Evidence from Publicly Traded Firms
Atanassov, J. (2016) · Management Science · doi:10.1287/mnsc.2014.2097 · Cited by 157
Metadata
- Authors
- HOUSTON, J., & JAMES, C.
- Affiliations
- Northwestern University (US)
- Venue
- The Journal of Finance
- Publisher
- Wiley
- Published
- 1996-12
- Volume
- 51
- Issue
- 5
- Pages
- 1863-1889
- ISSN
- 0022-1082 (ISSN-L)
- 1540-6261
- OpenAlex
- W2129929567
- Cited by
- 792
- References
- 1
- Citations by year
- 2026: 12 · 2025: 36 · 2024: 23 · 2023: 22 · 2022: 22 · 2021: 17 · 2020: 31 · 2019: 28 · 2018: 21 · 2017: 28 · 2016: 39 · 2015: 38 · 2014: 34 · 2013: 42 · 2012: 37
- FWCI
- 76.46
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- The Journal of Finance (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Finance › Corporate Finance and Governance
- Social Sciences › Economics, Econometrics and Finance › Finance › Banking stability, regulation, efficiency
- Social Sciences › Business, Management and Accounting › Accounting › Financial Analysis and Corporate Governance
- Keywords
- bank debt, public debt, debt structure, growth opportunities, bank-firm relationships, corporate borrowing, information asymmetry, listed companies
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Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
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