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a decomposition of EU banks.stock returns to cash-flow and expected return news components. The main findings are that … relatively more important for larger than for smaller banks. Moroever, variables used in the literature as cash-flow proxies … explain a higher share of the cash-flow component of the total excess returns for smaller than for larger EU banks. This …
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Small and medium-sized firms typically obtain capital via bank financing. They often rely on a mixture of relationship and arm’s-length banking. This paper explores the reasons for the dominance of heterogeneous multiple banking systems. We show that the incidence of inefficient credit...
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This paper studies optimal risk-taking and information disclosure by firms that obtain financing from both a relationshipʺ bank and arm’s-lengthʺ banks. We find that firm decisions are asymmetrically influenced by the degree of heterogeneity among banks: lowly-collateralized firms vary...
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