Many countries have experienced major economic changes since the mid-1980s as a result of the deregulation and liberalization of national financial systems – two key aspects of globalization – with some experiencing boom and bust in rapid succession. The small Northern European country of...

We address the question of how lending market competition, measured by the bargaining power of banks, affects the agency costs of debt finance. It is shown that intensified lending market competition will lead to lower lending rates and investment return distributions which are shifted towards...