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http://hdl.handle.net/10397/77019
| Title: | Do banks price independent directors’ attention? | Authors: | Huang, HH Lobo, GJ Wang, C Zhou, J |
Issue Date: | Aug-2018 | Source: | Journal of financial and quantitative analysis, Aug. 2018, v. 53, no. 4, p. 1755-1780 | Abstract: | Masulis and Mobbs (2014), (2015) find that independent directors with multiple directorships allocate their monitoring efforts unequally based on a directorship’s relative prestige. We investigate whether bank loan contract terms reflect such unequal allocation of directors’ monitoring effort. We find that bank loans of firms with a greater proportion of independent directors for whom the board is among their most prestigious have lower spreads, longer maturities, fewer covenants, lower syndicate concentration, lower likelihood of collateral requirement, lower annual loan fees, and higher bond ratings. Our evidence indicates that independent directors’ attention is associated with lower cost of borrowing. | Publisher: | Cambridge University Press | Journal: | Journal of financial and quantitative analysis | ISSN: | 0022-1090 | EISSN: | 1756-6916 | DOI: | 10.1017/S0022109018000157 | Rights: | Copyright © Michael G. Foster School of Business, University of Washington 2018 |
| Appears in Collections: | Journal/Magazine Article |
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