A firm with less redeployable assets, which are assets that have fewer alternative uses outside the firm, is more likely to borrow from banks than issue public debt. These findings are consistent with firms with less redeployable assets valuing the ability to renegotiate bank debt contracts...

Motivated by existing research on the informational and monitoring role of social trust, we examine how social trust affects firms’ choice between bank debt and public debt. Using firm-level data from 32 countries, we document that higher social trust is associated positively (negatively) with...