Managerial risk taking incentives, relationship lending and cost of debt

Chen, Liqiang

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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