Managerial risk taking incentives, relationship lending and cost of debt

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dc.creator Chen, Liqiang
dc.date.accessioned 2014-02-07T19:42:08Z
dc.date.available 2014-02-07T19:42:08Z
dc.date.issued 2011
dc.identifier http://library2.smu.ca/bitstream/handle/01/25390/asb_proceedings_2011.pdf#page=168
dc.identifier.uri http://library2.smu.ca/xmlui/handle/01/25650
dc.description.abstract This paper provides empirical evidence on how lending relationships can impact lending banks’ sensitivities to managerial risk taking incentives. Bank loans with higher managerial risk taking incentives will carry higher loan spreads, all else being equal. However, relationship lending can reduce the lending banks’ sensitivities to managerial risk taking incentives by 36% on average in terms of loan spreads. Such impact is more pronounced in firms with a higher information opacity level. Overall, our results imply that lending relationships play an important role in mitigating agency cost of debt from managerial risk taking incentives. en_CA
dc.description.provenance Submitted by Trish Grelot (trish.grelot@smu.ca) on 2014-02-07T19:42:08Z No. of bitstreams: 0 en
dc.description.provenance Made available in DSpace on 2014-02-07T19:42:08Z (GMT). No. of bitstreams: 0 Previous issue date: 2011 en
dc.language.iso en en_CA
dc.publisher Atlantic Schools of Business en_CA
dc.subject.lcsh Financial risk
dc.subject.lcsh Executives -- Salaries, etc.
dc.subject.lcsh Capital costs
dc.title Managerial risk taking incentives, relationship lending and cost of debt en_CA
dc.type Text en_CA
dcterms.bibliographicCitation Proceedings of the 41st Atlantic Schools of Business conference, University of Prince Edward Island, 2011, pp 164-180
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