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<p>We examine the borrowing costs of dual-class firms from a life-cycle perspective. Using a sample of U.S. listed firms, we find that dual-class firms face significantly higher loan spreads than single-class firms only during the growth stage, with no meaningful differences in the introduction or maturity stages. This result is robust to a range of tests addressing self-selection, simultaneity, and omitted variable concerns. We interpret this pattern through the hold-up theory of relationship lending: bank-dependent dual-class firms exhibit a hump-shaped borrowing cost profile over the life cycle, with spreads peaking in the growth stage when banks exploit informational advantages. Our findings indicate that the cost of dual-class ownership is inherently dynamic and operates through debt financing channels.</p>

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Dual-class ownership, borrowing costs, and the life cycle effect

  • 期刊论文

  • 出版模式：

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  • 发表日期：

    2026年6月26日

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  • Xiaodan Li,
  • Min-Teh Yu,
  • Yang Zhao

摘要

We examine the borrowing costs of dual-class firms from a life-cycle perspective. Using a sample of U.S. listed firms, we find that dual-class firms face significantly higher loan spreads than single-class firms only during the growth stage, with no meaningful differences in the introduction or maturity stages. This result is robust to a range of tests addressing self-selection, simultaneity, and omitted variable concerns. We interpret this pattern through the hold-up theory of relationship lending: bank-dependent dual-class firms exhibit a hump-shaped borrowing cost profile over the life cycle, with spreads peaking in the growth stage when banks exploit informational advantages. Our findings indicate that the cost of dual-class ownership is inherently dynamic and operates through debt financing channels.