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Essays on Banking and Corporate Finance

Chala, Alemu Tulu LU (2017)
Abstract
This doctoral dissertation comprises three independent essays on banking and corporate finance. The essays are preceded by an introduction to the thesis. The first essay explores whether refinancing risk is an important determinant of debt-maturity decisions. To this end, it investigates how firms with refinancing risk choose the maturity of new loans they obtain during the 2007--2009 financial crisis. The firms' refinancing risk is measured by the maturing portion of outstanding long-term debt. The result shows that firms with a high refinancing risk choose longer maturities.

The second essay examines the association between a lead arranger's relationship with a firm and its retained share in the loan to that firms. While some... (More)
This doctoral dissertation comprises three independent essays on banking and corporate finance. The essays are preceded by an introduction to the thesis. The first essay explores whether refinancing risk is an important determinant of debt-maturity decisions. To this end, it investigates how firms with refinancing risk choose the maturity of new loans they obtain during the 2007--2009 financial crisis. The firms' refinancing risk is measured by the maturing portion of outstanding long-term debt. The result shows that firms with a high refinancing risk choose longer maturities.

The second essay examines the association between a lead arranger's relationship with a firm and its retained share in the loan to that firms. While some literature indicates that lending relationships can help to alleviate ex post agency conflicts, others imply that relationship lead arrangers may use their information advantage to exploit syndicate participants. Using syndicated loans made to U.S. firms, this article shows that lead arrangers retain a smaller share in lending relationships with firms.

The third essay (co-authored with Jens Forssbaeck) examines the relationship between collateral and credit rationing. In theory, the use of collateral in credit contracting should mitigate the information problems that are widely held to be the primary cause of credit rationing. However, direct empirical evidence on this link is scant. Using survey data that provides clean measures of quantity and loan size rationing, our results suggest that collateral reduces the likelihood of experiencing loan-size credit rationing. (Less)
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author
opponent
  • Professor Santos, João A.C., Federal Reserve Bank of New York
organization
publishing date
type
Thesis
publication status
published
subject
keywords
Refinancing Risk, Debt Maturity, Financial Crisis, Syndicated Lending, Relationships, Retained Share, Loan-size Rationing, Collateral
pages
220 pages
publisher
Printed in Sweden by Media-Tryck, Lund University
defense location
Holger Crafoord Centre EC3:108
defense date
2017-11-13 10:15
ISBN
978-91-7753-451-8
978-91-7753-450-1
language
English
LU publication?
yes
id
cb80adb5-7e7f-4f8e-b8bd-231eda2253be
date added to LUP
2017-10-11 11:33:13
date last changed
2017-10-11 14:13:41
@phdthesis{cb80adb5-7e7f-4f8e-b8bd-231eda2253be,
  abstract     = {This doctoral dissertation comprises three independent essays on banking and corporate finance. The essays are preceded by an introduction to the thesis. The first essay explores whether refinancing risk is an important determinant of debt-maturity decisions. To this end, it investigates how firms with refinancing risk choose the maturity of new loans they obtain during the 2007--2009 financial crisis. The firms' refinancing risk is measured by the maturing portion of outstanding long-term debt. The result shows that firms with a high refinancing risk choose longer maturities.<br/><br/>The second essay examines the association between a lead arranger's relationship with a firm and its retained share in the loan to that firms. While some literature indicates that lending relationships can help to alleviate ex post agency conflicts, others imply that relationship lead arrangers may use their information advantage to exploit syndicate participants. Using syndicated loans made to U.S. firms, this article shows that lead arrangers retain a smaller share in lending relationships with firms. <br/><br/>The third essay (co-authored with Jens Forssbaeck) examines the relationship between collateral and credit rationing. In theory, the use of collateral in credit contracting should mitigate the information problems that are widely held to be the primary cause of credit rationing. However, direct empirical evidence on this link is scant. Using survey data that provides clean measures of quantity and loan size rationing, our results suggest that collateral reduces the likelihood of experiencing loan-size credit rationing.},
  author       = {Chala, Alemu Tulu},
  isbn         = {978-91-7753-451-8},
  keyword      = {Refinancing Risk,Debt Maturity,Financial Crisis,Syndicated Lending,Relationships,Retained Share,Loan-size Rationing,Collateral},
  language     = {eng},
  month        = {11},
  pages        = {220},
  publisher    = {Printed in Sweden by Media-Tryck, Lund University},
  school       = {Lund University},
  title        = {Essays on Banking and Corporate Finance},
  year         = {2017},
}