IDEAS home Printed from https://ideas.repec.org/a/oup/rfinst/v32y2019i8p3075-3104..html
   My bibliography  Save this article

Information Sharing, Holdup, and External Finance: Evidence from Private Firms

Author

Listed:
  • Andrew Bird
  • Stephen A Karolyi
  • Thomas G Ruchti

Abstract

To mitigate holdup by an informed incumbent lender, a private borrower may publicly share information in order to increase lender competition. Despite proprietary costs, a subset of private borrowers voluntarily share private information in loan and credit underwriting agreements. These borrowers switch lenders at a 16% higher rate and receive lower loan financing costs. For private firms that go public, we analyze changes in the net benefits of information sharing and study the potential estimation bias from unobservable borrower quality. This setting corroborates our inference that voluntary information sharing reduces lender holdup and alleviates financial constraints for private firms. Received May 25, 2017; editorial decision August 8, 2018 by Editor David Denis.

Suggested Citation

  • Andrew Bird & Stephen A Karolyi & Thomas G Ruchti, 2019. "Information Sharing, Holdup, and External Finance: Evidence from Private Firms," The Review of Financial Studies, Society for Financial Studies, vol. 32(8), pages 3075-3104.
  • Handle: RePEc:oup:rfinst:v:32:y:2019:i:8:p:3075-3104.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/rfs/hhy110
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lei, Ni & Miao, Qin & Yao, Xin, 2023. "Does the implementation of green credit policy improve the ESG performance of enterprises? Evidence from a quasi-natural experiment in China," Economic Modelling, Elsevier, vol. 127(C).
    2. Shi, Wei-Zhong & Ching, Yann-Peng & Fok, Robert (Chi-Wing) & Chang, Yuanchen, 2023. "Bank information monopolies and hold-up effects: International evidence," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 286-311.
    3. Daniel Saavedra, 2023. "Do firms follow the SEC’s confidential treatment protocols? Evidence from credit agreements," Review of Accounting Studies, Springer, vol. 28(3), pages 1388-1412, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:rfinst:v:32:y:2019:i:8:p:3075-3104.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/sfsssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.