Corporate Reputation, Debt Contracting, and Bank Loans: Evidence from Data Breaches

2019 ◽  
Author(s):  
Matteo Binfarè
Keyword(s):  
Corporate Reputation ◽  
Bank Loans ◽  
Debt Contracting ◽  
Data Breaches

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.

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

2015 ◽  
Author(s):  
Iftekhar Hasan ◽  
Chun Keung (Stan) Hoi ◽  
Qiang Wu ◽  
Hao Zhang
Keyword(s):  
Social Capital ◽  
Bank Loans ◽  
Debt Contracting ◽  
Public Bonds

Effects of data breaches from user-generated content: A corporate reputation analysis

2019 ◽  
Vol 37 (4) ◽  
pp. 492-504 ◽  
Author(s):  
Ilenia Confente ◽  
Giorgia Giusi Siciliano ◽  
Barbara Gaudenzi ◽  
Matthias Eickhoff
Keyword(s):  
Corporate Reputation ◽  
User Generated Content ◽  
Data Breaches

Accounting Quality and Debt Contracting

2008 ◽  
Vol 83 (1) ◽  
pp. 1-28 ◽  
Author(s):  
Sreedhar T. Bharath ◽  
Jayanthi Sunder ◽  
Shyam V. Sunder
Keyword(s):  
Public Debt ◽  
Information Access ◽  
Bank Loans ◽  
Accounting Quality ◽  
Debt Contracts ◽  
Private Debt ◽  
Debt Contracting ◽  
Interest Spreads ◽  
Processing Abilities ◽  
The Impact

We study the role of borrower accounting quality in debt contracting. Specifically, we examine how accounting quality affects the borrower's choice of private versus public debt market and how the design of debt contracts vary with accounting quality in the two markets. We find that accounting quality affects the choice of the market, with poorer accounting quality borrowers preferring private debt, i.e., bank loans. This is consistent with banks possessing superior information access and processing abilities that reduce adverse selection costs for borrowers. We also find that accounting quality has an economically significant but differential impact on contract design in the two markets consistent with differences in recontracting flexibility across the two markets. In the case of private debt, since there is greater recontracting flexibility, both the price (i.e., interest) and non-price (i.e., maturity and collateral) terms are significantly more stringent for poorer accounting quality borrowers, unlike public debt where only the price terms are more stringent. The impact of accounting quality on interest spreads of public debt is 2.5 times that of the private debt, since the price terms alone reflect the variation in accounting quality.

Organized Labor and Debt Contracting: Firm-Level Evidence from Collective Bargaining

2016 ◽  
Vol 92 (3) ◽  
pp. 57-85 ◽  
Author(s):  
Lin Cheng
Keyword(s):  
Collective Bargaining ◽  
Information Asymmetry ◽  
Bank Loans ◽  
Data Availability ◽  
Organized Labor ◽  
Firm Level ◽  
Debt Contracting ◽  
Proprietary Costs ◽  
Adverse Selection Costs ◽  
Public Disclosures

ABSTRACT This paper employs a firm-level collective bargaining dataset to investigate the effect of labor, as an important stakeholder of a firm, on debt contracting. I conjecture and provide evidence that firms with strong organized labor prefer bank loans to public bonds because, by communicating with banks privately, unionized firms can reduce the adverse selection costs while preserving the information asymmetry with organized labor. Furthermore, I show that organized labor influences the structure of syndicated loans. When firms with strong unions withhold public disclosures, but communicate privately with lead lenders, heightened information asymmetry between the lead lenders and the participant lenders induces the lead lenders to retain larger shares of the loans and form more concentrated syndicates. Overall, this study demonstrates that the proprietary costs of disclosure related to organized labor significantly influence firms' debt contracting decisions and outcomes. Data Availability: Data are available from sources identified in the text.

Discretionary Accruals in Italian Private Firms and Non-Linear Bank Loan Granting

2017 ◽  
pp. 83-99
Author(s):  
Elisabetta Mafrolla ◽  
Viola Nobili
Keyword(s):  
Financial Reporting ◽  
Banking System ◽  
Regulatory System ◽  
Discretionary Accruals ◽  
Bank Loans ◽  
Bank Loan ◽  
Banking Union ◽  
Private Firms ◽  
European Banking Union

This paper investigates whether and at what extent private firms reduce the quality of their accruals in order to signal a better portrait to the bank and obtain new or larger bank loans. We measure earnings discretionary accruals of a sample of Italian private firms, testing whether new and larger bank loans are associated with a higher (lower) quality of earnings in borrowers' financial reporting. We study bank loan levels and changes and how they impact discretionary accruals and found that, surprisingly, private firms' discretionary accruals are systematically positively affected by an increase in bank loans, although they are negatively affected by the credit worthiness rating assigned to the borrowers. We find that the monitoring role of the banking system with regard to the adoption of discretionary accruals is effective only when the loan is very large. This paper may have implications for policy-makers as it contributes to the understanding of the shortcomings of the banking regulatory system. This is an extremely relevant issue since the excessive amount of non-performing loans held by Italian banks recently threatened the stability of the European Banking Union as a whole.

Sign in / Sign up

Export Citation Format

Share Document