Brown, Martin; Ongena, Steven; Yeşin, Pınar - 2011
We model the choice of loan currency in a framework which features a trade-off between lower cost of debt and the risk … of firm-level distress costs. Under perfect information foreign currency funds come at a lower interest rate, all foreign … currency earners as well as those local currency earners with high revenues and/or low distress costs choose foreign currency …