Adverse Selection in Corporate Loan Markets

• 成果类型: Article
• 署名作者: Beyhaghi, Mehdi; Fracassi, Cesare; Weitzner, Gregory
• 署名单位: Federal Reserve System - USA; Federal Reserve System Board of Governors; University of Texas System; University of Texas Austin; McGill University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082; 1540-6261
• DOI: 10.1111/jofi.70011
• 发表日期: 2026-02
• 页码: 239-284
• 关键词: Asymmetric information; Financial dependence; BANK CONCENTRATION; capital structure; SHARE INEQUALITY; COMPETITION; GROWTH; POWER; constraints; sector

摘要

Theories of competition typically predict a positive relationship between market concentration and prices. However, in loan markets, adverse selection can reverse this relationship as riskier borrowers become more likely to receive funding. Using supervisory data, we show that interest rates, borrower risk, and lending volume are higher in markets with more banks. We also create a novel measure of markup that is orthogonal to borrower risk, and find that, consistent with adverse selection, markups are higher after repeated borrowing relationships. Finally, we use a shock to large banks' lending costs to provide further support for the adverse selection channel.