We investigate the real effects of shadow banking in the case of technological innovation. Using manually collected entrusted loan data, we find that firm-to-firm entrusted loans, once the largest part of the shadow banking sector in China, enhance the borrowers’ innovation output. The effects...

By integrating the staggered interstate bank deregulation into a gravity model following Goetz, Laeven, and Levine (2013, 2016), we construct a time-varying bank-specific instrument for geographic diversification and investigate its causal effect on corporate innovation via the lending channel....

We examine how monitoring costs and costs of financial distress affect the use of performance pricing provisions in bank loan contracts. We find that firms that are easier to monitor, such as those with better accounting quality, lower information opacity, or a stronger prior relationship with...

To what extent do credit lines provide liquidity insurance? We investigate this question using a unique dataset with firms' actual draw-down rates and find that firms draw down their lines of credit at higher rates than the initial contract rates recorded in Dealscan. More importantly, we find...

We explore information spillovers and cross monitoring between the stock and loan markets around Regulation SHO. Our setting directly affects information production and monitoring in the stock market but is exogenous to the loan market. We find that only those firms without bank monitors exhibit...