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We investigate whether a borrower's media coverage influences the syndicated loan origination and participation decisions of informationally disadvantaged lenders, loan syndicate structures, and interest spreads. In syndicated loan deals, information asymmetries can exist between lenders that have a relationship with a borrower and less informed, nonrelationship lenders competing to serve as lead arranger on a syndicated loan, and also between lead arrangers and less informed syndicate participants. Theory suggests that the aggressiveness with which less informed lenders compete for a loan deal increases in the sentiment of public information signals about a borrower. We extend this theory to syndicated loans and hypothesize that the likelihood of less informed lenders serving as the lead arranger or joining a loan syndicate is increasing in the sentiment of media-initiated, borrower-specific articles published prior to loan origination. We find that as media sentiment increases (1) outside, nonrelationship lenders have a higher probability of originating loans; (2) syndicate participants are less likely to have a previous relationship with the borrower or lead bank; (3) lead banks retain a lower percentage of loans; and (4) loan spreads decrease.

Using a sample of non-U.S. borrowers from 40 countries during 1997 through 2005, this paper investigates the effect of the voluntary adoption of International Financial Reporting Standards (IFRS) on price and nonprice terms of loan contracts and loan ownership structure in the international loan market. Our results reveal the following. First, banks charge lower loan rates to IFRS adopters than to non-adopters. The difference in loan rates in excess of a benchmark rate between the two groups is about 20 basis points for all loans and nearly 31 basis points for London Interbank Offered Rate (LIBOR)-based loans. Second, banks impose more favorable nonprice terms on IFRS adopters, particularly less restrictive covenants. We also provide evidence suggesting that banks are more willing to extend credit to IFRS adopters through larger loans and longer maturities. Finally, IFRS adopters attract significantly more foreign lenders participating in loan syndicates than non-adopters.

This study investigates how bank mergers and acquisitions (M&As) reshape the monitoring architecture of syndicated loans and, by extension, borrowers’ financing conditions. Using a global panel of 20,299 syndicated loan contracts, originating in 43 countries between 1982 and 2020, we link LPC DealScan data to Securities Data Company M&A records to trace each loan’s lead arrangers before and after consolidation events. Fixed-effects regressions, enriched with borrower- and loan-level controls, reveal three key patterns. First, post-merger loans exhibit significantly more concentrated syndicates: the Herfindahl–Hirschman Index rises by roughly 130 points and lead arrangers retain an additional 0.8–1.1 percentage points of the loan, consistent with heightened monitoring incentives. Second, these effects are amplified when information asymmetry is acute, i.e., for opaque or unrated firms, supporting moral hazard theory predictions that lenders internalize greater risk by holding larger stakes. Third, relational capital tempers the impact of consolidation: borrowers with repeated pre-merger relationships face smaller increases in syndicate concentration, while switchers experience the most significant jumps. Robustness checks using lead arranger market share, alternative spread measures, and lag structures confirm the findings. Overall, the results suggest that bank consolidation strengthens lead arrangers’ incentives to monitor but simultaneously reduces risk-sharing among participant lenders. For borrowers, the net effect is a trade-off between potentially tighter oversight and reduced syndicate diversification, with the balance hinging on transparency and prior ties to the lender. These insights refine our understanding of how structural shifts in the banking sector cascade into corporate credit markets and should inform both antitrust assessments and borrower funding strategies.

This paper examines the effect of information intermediaries, specifically financial analysts, on the non-price terms and syndicate structure of bank loans. We find that loans to firms with higher analyst coverage have significantly less intensive covenant restrictions, a lower likelihood of requiring collateral and a lower likelihood of having performance-pricing provisions. Furthermore, our results document a negative relation between analyst coverage and loan maturity, implying that banks become more information-sensitive when lending to firms with large analyst coverage. We also find evidence that lenders tend to form less concentrated syndicate when the number of analysts increases.

I investigate whether and how syndicate size influences the type of covenants used in debt contracts. Prior theory and evidence suggest renegotiation considerations from coordination difficulties in large syndicates and intertemporal transfers due to relationship lending in small syndicates are factors in the design of covenants. I find that for large syndicates, borrowers and lenders avoid the use of flexibility-reducing covenants that are more likely to impact negatively on value-enhancing corporate policies in good states of the world. This effect becomes stronger when the borrower has fewer outside financing options. Additionally, I find contracts with large syndicates are more likely to have more covenant slack, include performance pricing provisions, have tailored capital expenditure covenants, and principally rely on covenants that are directly linked to the current performance of the borrower. Collectively, these results imply that syndicate size and related renegotiation considerations affect how accounting information is used in debt contracts.

Reciprocity is a subtle but influential factor in maintaining business relationships. We examine the stock recommendations, earnings forecasts, and target prices issued by “reciprocity-pressured” analysts affiliated with securities underwriters who rely on other major underwriters’ invitations to be in syndicates. Consistent with the reciprocal pressure hypothesis, we find that reciprocity-pressured analysts delay releasing negative information on other major underwriters’ clients despite the fact that these analysts’ affiliated underwriters do not receive fees from those clients. We also document temporary retaliation by major underwriters when reciprocity-pressured analysts deviate from such expected reciprocity. The results suggest that reciprocal pressure in the investment banking industry has a real effect on analyst information dissemination. This paper was accepted by Suraj Srinivasan, accounting .

Open networks give actors non-redundant information that is diverse, while closed networks offer redundant information that is easier to interpret. Integrating arguments about network structure and the similarity of actors' knowledge, we propose two types of network configurations that combine diversity and ease of interpretation. Closed-diverse networks offer diversity in actors' knowledge domains and shared third-party ties to help in interpreting that knowledge. In open-specialized networks, structural holes offer diversity, while shared interpretive schema and overlap between received information and actors' prior knowledge help in interpreting new information without the help of third parties. In contrast, actors in open-diverse networks suffer from information overload due to the lack of shared schema or overlapping prior knowledge for the interpretation of diverse information, and actors in closed-specialized networks suffer from overembeddedness because they cannot access diverse information. Using CrunchBase data on early-stage venture capital investments in the U.S. information technology sector, we test the effect of investors' social capital on the success of their portfolio ventures. We find that ventures have the highest chances of success if their syndicating investors have either open-specialized or closed-diverse networks. These effects are manifested beyond the direct effects of ventures' or investors' quality and are robust to controlling for the possibility that certain investors could have chosen more promising ventures at the time of first funding.

We find that repeated borrowing from the same lender translates into a 10—17 bps lowering of loan spreads and that relationships are especially valuable when borrower transparency is low. These results hold using multiple approaches (propensity score matching, instrumental variables, and treatment effects model) that control for the endogeneity of relationships. We also provide a demarcation line between relationship and transactional lending. Spreads charged for relationship loans and nonrelationship loans are statistically identical if the borrower is in the largest 30% by asset size; has public rated debt; or is part of the S&P 500 index. Past relationships reduce collateral requirements and are also associated with obtaining larger loans. Our results imply that, even for firms that have multiple sources of outside financing, borrowing from a prior lender obtains better loan terms.

Organizational theorists have extensively documented the increased likelihood that two organizations will form a relationship if they have preexisting relationships with the same third party, a phenomenon known as triadic closure. They have neglected, however, the importance of the shared third party in facilitating or reversing this process. I theorize that the collaboration outcomes and competitive concerns of the intermediary spanning an open triad play a crucial role in whether that triad closes. Using a longitudinal dataset of the investment decisions of limited partners investing in U.S. venture capital firms in the period 1997–2007, I find that an intermediary is less likely to facilitate a direct connection under two conditions: (1) the intermediary has experienced failed collaborations with one of the indirectly connected parties or (2) the intermediary has competitive concerns—driven by its replaceability and relative attractiveness—that it may lose future business to one of the indirectly connected parties. The paper goes beyond the conceptualization of indirect ties as passive scaffolding that supports creating direct ties and instills a greater appreciation for the role of the intermediary that sits across them.

Using U.S. venture capital investment data from 1985 to 2008 and qualitative interviews, we examine how group dynamics influence the growth of inter-organizational collaborations through the addition of new members. We argue that group dynamics that develop among members in a collaboration, as well as between each member and prospective newcomers, influence which new members join existing collaborations. For prospective newcomers, we distinguish between their depth of embeddedness, the strength of a prospective newcomer’s past relationships with any incumbent member of the collaboration, and breadth of embeddedness, the proportion of incumbent members with which the newcomer has had prior ties. For incumbent members, we examine network faultlines, or subgroups in their collaboration, that may lead to power struggles. We find that when strong network faultlines exist, the depth and breadth of a prospective newcomer’s embeddedness will have different influences on its likelihood of joining the collaboration: A newcomer with greater depth of embeddedness with the collaboration may be perceived to influence power dynamics in the group, leading to lower likelihood of joining, whereas a newcomer with greater breadth may not suffer the same liability. We also find that newcomers with greater depth benefit from the status of their strongest tie in the collaboration, and newcomers with greater breadth are more desirable partners when they are more experienced. Overall, our results highlight the mechanisms of anticipated power distribution and mediation as overlooked concerns in member additions to collaborations, especially when there is conflict.