Board corruption and loan contracts

Robin Chen, Chia Wei Huang, Chih Yung Lin*

*此作品的通信作者

研究成果: Article同行評審

2 引文 斯高帕斯(Scopus)

摘要

In this study, we examine the effects of board corruption on the financing costs of firms. We construct an index of perceived corruption that uses the average level of corruption that is linked to a director's surname. The evidence shows that lending banks attach higher spreads and stricter covenants to the loan contracts of firms with high perceived board corruption. Specifically, when the perceived board corruption increases after mergers and acquisitions, firms are charged higher loan spreads. Further analysis shows that the effects of board corruption on financing costs become stronger when firms have weak governance mechanisms. These results show that banks recognize board corruption as a source of agency problem with borrowers when they make lending decisions.

原文English
頁(從 - 到)1929-1956
頁數28
期刊Journal of Business Finance and Accounting
49
發行號9-10
DOIs
出版狀態Published - 1 10月 2022

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