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Benefits from Lending Relationships in Public Debt Markets: Empirical Evidence from the Commercial Paper Market
2012
Social Science Research Network
Preserved Fulltext
There is a large and growing body of literature on the benefits of established lending relationships with banks, which is an intermediated debt market. We extend that literature by testing for benefits from direct lending relationships in the commercial paper market, which is a public debt market. Diamond (1991) suggests that firms access public debt markets when they have enough reputation to no longer require the close monitoring of banks. Using daily rate data for dealer-placed and
doi:10.2139/ssrn.2138514
fatcat:pllib7uvcvgmpgwxkzrd46arse