Determinants of Bank Debt in a Continental Financial System. Evidence from Spanish Companies
Posted: 22 May 2005
We test hypotheses about the structure of corporate debt ownership and the use of bank debt by firms in a civil-law country, Spain. We focus on bank debt effects in the presence of information asymmetries and agency costs, and on efficient versus inefficient firm liquidation. We find that the relation between growth opportunities and bank financing is not as strong as the one found in common law countries, that there is a positive relation between firm size and the proportion of bank debt used, and that firms closer to bankruptcy and highly leveraged are more likely to use bank debt.
Keywords: Public debt, bank debt, asymmetric information, capital structure
JEL Classification: G21, G32
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