 Capital market access and corporate loan structureK. Khang and T. D. King Applied Economics, 2015, vol. 47, issue 4, 374-397 Abstract: In this article, we use a sample of 14 075 loan packages issued between 1993 and 2007 to examine if borrower access to external capital markets influences corporate loan structure. We classify firms into three access categories: private, unrated public and rated public. Private firms have the lowest access, and to date, no large sample investigation of their loans has been done in the literature. Rated public firms access the capital markets the most. We find the level of access influences loan structure in ways that are consistent with having greater or fewer financing alternatives, as well as theories on information asymmetry, agency and monitoring. In particular, loans to firms with higher levels of access have shorter maturities, fewer loan facilities per package, and a lower probability of being secured. We also find that a higher level of access results in a higher incidence of single-lender loans, but among multiple-lender loans, it leads to a larger number of lenders. Furthermore, we find evidence that access affects financial covenants in a nonmonotonic manner. Finally, lender type and economic conditions influence loan structure. Our results are robust to endogeneity caused by simultaneity of contract terms and rating. Date: 2015 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:47:y:2015:i:4:p:374-397 Ordering information: This journal article can be ordered from DOI: 10.1080/00036846.2014.972544 Access Statistics for this article Applied Economics is currently edited by Anita Phillips More articles in Applied Economics from Taylor & Francis Journals |
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