Skip Navigation

This Article
Right arrow Full Text (PDF)
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Similar articles in ISI Web of Science
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrow Search for citing articles in:
ISI Web of Science (13)
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Cantillo, M.
Right arrow Articles by Wright, J.
Right arrow Search for Related Content
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

Rev Fin 2000; 13:155-189
© 2000 the Society for Financial Studies

Article

How do firms choose their lenders? An empirical investigation

M Cantillo1,2,z and J Wright3
1 INCAE
2 Walter Haas School of Business, University of California, Student Services Building S545, Berkeley, CA 94720-1900, USA
3 University of Auckland, New Zealand
z Corresponding author

Abstract

This article investigates which companies finance themselves through intermediaries and which borrow directly from arm's length investors. Our empirical results show that large companies with abundant cash and collateral tap credit markets directly; these markets cater to safe and profitable industries, and are most active when riskless rates or intermediary earnings are low. We show that determinants of lender selection sharpen during investment downturns and that there are substantial asymmetries in the way firms enter and exit capital markets. These results support a theoretical framework where intermediaries have better reorganizational skills but a higher opportunity cost of capital than bondholders.


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?


This article has been cited by other articles:


Home page
 REV FINANC STUDHome page
M. Faulkender and M. A. Petersen
Does the Source of Capital Affect Capital Structure?
Rev. Financ. Stud., March 1, 2006; 19(1): 45 - 79.
[Abstract] [Full Text] [PDF]

Home page
 REV FINANC STUDHome page
M. Cantillo
A Theory of Corporate Capital Structure and Investment
Rev. Financ. Stud., October 1, 2004; 17(4): 1103 - 1128.
[Abstract] [Full Text] [PDF]


Disclaimer:
Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.