The above result is difficult to re

The above result is difficult to reconcile with both hold-up and information asymmetry interpretations. If the increase in covenant intensity in a relationship is related to ex ante hold-up, it should be concentrated in firms with low bargaining power. In addition, both ex post hold-up as well as information asymmetry considerations should be less relevant for firms with access to outside capital since public information production should limit such problems for these firms. Yet covenant use does not decline in exclusive relationships for firms without public debt market access. Thus, the results are difficult to reconcile with a rise in covenant costs in exclusive relationships as the reason for the observed effects.