In the financial economics literature debt contracts provide efficient solutions for addressing managerial moral hazard problems. We analyze a model with multiple projects where the manager obtains private information about their quality after the contract with investors is agreed. The...

Systemically important banks are subject to at least two departures from the neutrality of debt versus equity financing: the tax deductibility of interest payments and implicit funding subsidies. This paper fills a gap in the literature by comparing their mechanism and interaction within a...

This study examines the influence of a firm's geographical location on corporate debt and provides evidence that the higher cost of collecting information on firms distant from urban areas has significant implications on a wide array of corporate debt characteristics. We find that rural firms...

The paper investigates the problem of the excess of deposits in banks over loans observed in the US, Europe and Japan, resulting in the cash hoarding in banks. The paper argues that as the higher the borrowers' debt service ratio, the greater default risks, borrowers with high debt service ratio...