Trends in Corporate Borrowing

Posted: 9 Nov 2021

See all articles by Tobias Berg

Tobias Berg

Frankfurt School of Finance & Management

Anthony Saunders

New York University (NYU)

Sascha Steffen

Frankfurt School of Finance & Management

Multiple version iconThere are 2 versions of this paper

Date Written: November 1, 2021

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.

Suggested Citation

Berg, Tobias and Saunders, Anthony and Steffen, Sascha, Trends in Corporate Borrowing (November 1, 2021). Annual Review of Financial Economics, Vol. 13, pp. 321-340, 2021, Available at SSRN: https://ssrn.com/abstract=3957026 or http://dx.doi.org/10.1146/annurev-financial-101520-070630

Tobias Berg

Frankfurt School of Finance & Management ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

Anthony Saunders

New York University (NYU)

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Sascha Steffen (Contact Author)

Frankfurt School of Finance & Management ( email )

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Germany
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HOME PAGE: http://www.sascha-steffen.de

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