Religion and Bank Loan Terms

2015 ◽  
Author(s):  
Wen He ◽  
Maggie Rong Hu
Keyword(s):  
Bank Loan ◽  
Loan Terms

The Association Between Bank Credit Terms and Conditions and the Business Cycle in the Euro Area

2019 ◽  
Vol 65 (4) ◽  
pp. 247-256
Author(s):  
Dimitrios Anastasiou ◽  
Konstantinos Drakos
Keyword(s):  
Business Cycle ◽  
Euro Area ◽  
Bank Loan ◽  
Bank Credit ◽  
Monetary Policies ◽  
Policy Makers ◽  
Long Run ◽  
Loan Terms ◽  
Short Run ◽  
The Business Cycle

Abstract We explored the trajectory of bank loan terms and conditions over the business cycle, where the latter was decomposed into its long-run (trend) and short-run (cyclical) components. We found that deterioration of each business cycle component leads to a significant tightening of credit terms and conditions. We found mixed results concerning the symmetry of impacts of the short and long run components. Symmetry was found between the terms and conditions on loans for small vs. large enterprises. Our findings provide very useful information to policy makers and should be taken into consideration when monetary policies are designed.

Does Information Technology Reputation Affect Bank Loan Terms?

2014 ◽  
Author(s):  
Jeong-Bon Kim ◽  
Byron Song ◽  
Theophanis C. Stratopoulos
Keyword(s):  
Information Technology ◽  
Bank Loan ◽  
Loan Terms

Audit Profession Development and Bank Loan Contracting

2020 ◽  
Author(s):  
Wenxia Ge ◽  
Tony Kang ◽  
Byron Y. Song ◽  
Gaoguang Zhou
Keyword(s):  
Rule Of Law ◽  
Auditor Independence ◽  
Bank Loan ◽  
Country Level ◽  
Loan Contracting ◽  
The World ◽  
Loan Terms ◽  
Loan Spreads ◽  
Timely Loss Recognition

This study examines the relation between country-level audit profession development (APD) and bank loan contracting around the world. Using a sample of bank loan data from 35 countries, we find that stronger APD is associated with more favorable loan terms, such as lower loan spreads, fewer covenants, and larger loan amounts. These effects are stronger in countries with a weaker rule of law. We also find that stronger APD attracts significantly more lenders participating in loans and more foreign lenders leading loans. A breakdown of APD into three subcategories, namely, auditor education, auditor independence and liability, and auditor oversight, reveals that all three influence various contracting terms. We also provide evidence that stronger APD is associated with a higher degree of timely loss recognition. Collectively, our findings show that APD improves bank loan contracting terms.

Religion and bank loan terms

2016 ◽  
Vol 64 ◽  
pp. 205-215 ◽  
Author(s):  
Wen He ◽  
Maggie (Rong) Hu
Keyword(s):  
Bank Loan ◽  
Loan Terms

Do Banks Price Firms' Data Breaches?

2020 ◽  
Author(s):  
Henry He Huang ◽  
Chong Wang
Keyword(s):  
Bank Loan ◽  
Data Breach ◽  
Exogenous Shock ◽  
Data Breaches ◽  
Loan Terms ◽  
Negative Effect ◽  
Remedial Actions ◽  
Loan Spreads ◽  
Reported Data ◽  
And Control

This paper studies the financial consequences of a reported data breach for bank loan terms. Using a staggered difference-in-differences approach with treatment and control samples matched by data breach propensity, we find that firms that have reported data breaches face higher loan spreads and their loans are more likely to require collateral and demand more covenants. The effects are more pronounced when the data breach involves criminal activities or the loss of a large number of records, or when the breached firm belongs to certain industries or has a high IT reputation. Moreover, using the introduction of state mandatory data breach notification laws as an exogenous shock, we find that the negative effect of data breaches on bank loan terms is more significant after these laws took effect. Our evidence also suggests that breached firms that take more remedial actions following the breach incident receive less unfavorable loan terms.

scholarly journals Social Capital and Debt Contracting: Evidence from Bank Loans and Public Bonds

2017 ◽  
Vol 52 (3) ◽  
pp. 1017-1047 ◽  
Author(s):  
Iftekhar Hasan ◽  
Chun Keung Hoi ◽  
Qiang Wu ◽  
Hao Zhang
Keyword(s):  
Social Capital ◽  
Causal Relation ◽  
Tax Avoidance ◽  
Bank Loans ◽  
Bank Loan ◽  
Debt Contracting ◽  
Loan Terms ◽  
Loan Spreads ◽  
Bond Spreads ◽  
Public Bonds

We find that firms headquartered in U.S. counties with higher levels of social capital incur lower bank loan spreads. This finding is robust to using organ donation as an alternative social capital measure and incremental to the effects of religiosity, corporate social responsibility, and tax avoidance. We identify the causal relation using companies with a social-capital-changing headquarters relocation. We also find that high-social-capital firms face loosened nonprice loan terms, incur lower at-issue bond spreads, and prefer public bonds over bank loans. We conclude that debt holders perceive social capital as providing environmental pressure that constrains opportunistic firm behaviors in debt contracting.

CEO Turnover, Information Uncertainty, and Debt Contracting

2019 ◽  
Vol 09 (02) ◽  
pp. 1950001
Author(s):  
Saiying Deng ◽  
Vincent J. Intintoli ◽  
Andrew Zhang
Keyword(s):  
Information Quality ◽  
Voluntary Turnover ◽  
Bank Loan ◽  
Information Uncertainty ◽  
Subsequent Increase ◽  
Debt Contracting ◽  
Loan Terms ◽  
Loan Financing ◽  
Negative Effect ◽  
Loan Spreads

CEO turnovers are important corporate events that can lead to significant changes within the firm. We find that CEO departures are associated with a subsequent increase in bank loan financing. The negative effect that CEO departures have on borrowing costs is largely driven by forced CEO turnovers. Following such departures, firms pay higher loan spreads, see an increase in covenants, and are more likely to be subject to collateral requirements, when compared to matched non-turnover and voluntary turnover firms. Evidence suggests that asset substitution and changes in accounting information quality help to explain the observed worsened terms following forced dismissals. On the other hand, more traditional voluntary departures are unrelated to changes in price and non-price loan terms.

Bank loan terms and conditions for Eurozone SMEs

2012 ◽  
Vol 41 (3) ◽  
pp. 717-732 ◽  
Author(s):  
Konstantinos Drakos
Keyword(s):  
Bank Loan ◽  
Loan Terms

Does auditor industry expertise affect bank loan costs?

2017 ◽  
Vol 32 (3) ◽  
pp. 295-324 ◽  
Author(s):  
Yinghong Zhang ◽  
Fang Sun ◽  
Chunwei Xian
Keyword(s):  
Interest Rates ◽  
Bank Loans ◽  
Bank Loan ◽  
Content Type ◽  
Loan Terms ◽  
Loan Spreads ◽  
The Impact ◽  
Auditor Industry Expertise ◽  
Industry Expertise ◽  
Industry Specialist

Purpose This paper aims to examine whether firms retaining industry-specialist auditors receive better price and non-price terms for bank loans. Design/methodology/approach Based on a sample of companies retaining big N auditors during the 2000-2010 period, this paper constructed six proxies for auditor industry expertise and tested three major loan terms: loan spreads, number of general and financial covenants and requirements for collateral. Findings It was found that companies retaining industry-specialist auditors receive lower interest rates and fewer covenants. Banks are also less likely to demand secured collateral. These findings are supported by several sensitivity tests. Research limitations/implications The findings suggest that auditor industry expertise provides incremental value to creditors and that bank loan cost is one economic benefit for companies hiring specialist auditors. Originality/value To the best of the authors’ knowledge, this study is the first to investigate the impact of auditor industry expertise on the cost of private debts.

Shareholder Litigation, Reputational Loss, and Bank Loan Contracting

2014 ◽  
Vol 49 (4) ◽  
pp. 1101-1132 ◽  
Author(s):  
Saiying Deng ◽  
Richard H. Willis ◽  
Li Xu
Keyword(s):  
Market Value ◽  
Bank Loan ◽  
Borrowing Costs ◽  
Loan Contracts ◽  
Self Selection ◽  
Shareholder Litigation ◽  
Loan Contracting ◽  
Loan Terms ◽  
Bank Loan Contracts ◽  
Loan Spreads

AbstractWe examine shareholder litigation and the price and nonprice terms of bank loan contracts. After filing a lawsuit, defendant firms pay higher loan spreads and up-front charges, experience more financial covenants, and are more likely to have a collateral requirement. These findings are consistent with reputational losses associated with shareholder litigation. The magnitude of a firm’s lost market value when the lawsuit is filed is positively related to the increase in the firm’s future borrowing costs. We investigate whether the lawsuit allegations and its merit affect future bank loan terms. Our results do not appear to be affected by self-selection.

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