"Banking Relationships and Supply-Chain Relationships" (Job market paper)
The paper examines the impact of banking relationships on the formation of supply-chain relationships among bank borrowers. Common banks might reduce the holdup risk associated with buyer-supplier relationships due to their role as monitors, or they might mitigate search frictions as a result of their private information about and attachment to their borrowers. At the same time, banks' role as information intermediaries can exacerbate holdup risk, impeding the formation of vertical relationships. Moreover, the formation of supply-chain networks, as opposed to arm's length transactions, results in a potential loss of diversication benets for the bank. Using data on customer-supplier relationships from the Compustat segment files, I find that common lending relationhips increase the probability of a supplier being selected to form a new supply-chain relationship.
"Conflicts in Bankruptcy and the Sequence of Debt Issues" (with A. Bris, A. Ravid and R. Sverdlove)
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