Understanding the extent to which interventions in financial markets can reduce liquidity constraints is of crucial importance to researchers and policymakers. Even though there is consensus that limited access to financing can reduce the number of profitable projects undertaken by...

We empirically explore whether firms have a target for the number of banks from which they borrow, and whether having multiple bank relationships has an impact on firms’ liquidity situation. A bank merger in Chile provides a quasi-experiment as it constitutes an exogenous reduction in the...