Trends in Corporate Borrowing

Tobias Berg, Anthony Saunders and Sascha Steffen ()
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Tobias Berg: Frankfurt School of Finance and Management, 60322 Frankfurt, Germany
Anthony Saunders: Stern School of Business, New York University, New York, NY 10012, USA
Sascha Steffen: Frankfurt School of Finance and Management, 60322 Frankfurt, Germany

Annual Review of Financial Economics, 2021, vol. 13, issue 1, 321-340

Abstract: Corporate borrowing has substantially changed over the last two decades. In this article, we investigate changes in borrowing of US publicly listed firms along trends in five key areas: (a) the funding mix of firms and the importance of balance-sheet versus off-balance-sheet borrowing; (b) the costs of corporate borrowing; (c) trends in nonprice loan terms; (d) the importance of banks versus nonbank institutional investors; and (e) the purpose for corporate borrowing. We explore these trends graphically over the 2002-2019 period, provide a narrative for these trends based on the theoretical and empirical literature in the respective areas, and discuss some implications for the coronavirus disease 2019 (COVID-19) pandemic. Finally, we document these trends for firms in the Eurozone countries and delineate similarities and differences.

Keywords: corporate borrowing; loans; bonds; contingent liquidity; institutional investors; loan purposes (search for similar items in EconPapers)
JEL-codes: G20 G21 G32 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (5)

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DOI: 10.1146/annurev-financial-101520-070630

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