Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
960578 | Journal of Financial Economics | 2007 | 36 Pages |
Abstract
I examine the effects of bank relationships on underwriter choice in the Japanese corporate bond market following the 1993 deregulation. Bank relationships have significant positive effects on a firm's underwriter choice. Relationship firms receive a small but significant fee discount and, consistent with the mitigating effect of competition on hold-up costs, multiple-relationship firms receive a significantly deeper discount than single-relationship firms. Bank shareholding alone negatively affects underwriter choice, whereas shareholding together with loans has significantly more positive effects than loans alone. Finally, existing relationships reduce a Japanese firm's switching probability by 32%, in contrast to only 6% for U.S. firms.
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Accounting
Authors
Ayako Yasuda,