We examine changes in bank loan contracts after borrowers experience a nearby local newspaper closure. Compared to a sample of control firms, we find that the closure of a local newspaper leads to higher interest spreads for borrowers. This effect is more pronounced when there are fewer related lenders in the syndicate, when lenders have less prior lending experience in the local area, when the closed local newspapers are associated with increases in misconduct cases, and for institutional lenders who rely more heavily on others for monitoring. In addition, we observe that loan contract amendments become less frequent, while covenant strictness increases following newspaper closures. Our main findings are robust to various research design specifications and are not driven by deteriorating local economic conditions. Our findings suggest that local media still plays a significant role in the debt markets, even as society moves deeper into the internet era.
We study how proprietary information flows in strategic alliances facilitate banks’ information collection in private debt markets. We argue that lenders that have previously worked with a borrower’s alliance partners have an information advantage and show that firms entering a strategic alliance receive a lower interest spread on loans from banks that have previously lent to their strategic partners than loans from other banks. Cross-sectional tests on alliances’ economic importance and participants’ information environment support our hypothesis that the loan price effect is driven by reduced information asymmetry between borrowers and their partners’ relationship banks. Last, we find borrowers are more likely to obtain debt financing from alliance-related banks than from other banks. Overall, our findings are consistent with lenders that have previously worked with an alliance counterparty possessing debt contracting-relevant information about the soft nature of alliance value and the partners’ commitment to alliances.
This study explores the association between firm innovation and loan covenant strictness. We find that lenders construct stricter contracts for firms filing more patents, consistent with lenders imposing more oversight on firms when they enter the commercialization stage after having demonstrated their inventiveness. Our results hold under propensity score matching and entropy balancing, and when exploiting the American Inventors Protection Act as a shock affecting unrelated banks’ access to patent filing information. The relationship we document is stronger when the lender has more expertise and for firms with higher default risk. We demonstrate that borrowers’ patent filings are associated with more future R&D and capital investment and with a higher likelihood of their acquiring firms in the industry of their patent filings. Our results are consistent with the theoretical prediction that lenders interpret patent filings as indicative of high inventive potential that requires stricter discipline and oversight by lenders in order to be converted into actual business success, and with them designing debt contract terms accordingly.
我们的研究显示，企业管理层倾向以不按比例的方式，汇报略高于以十进制作为单位的总收入（例如 1,000 万、3,000 万、10 亿），并审视这种行为的动机和后果。聚焦研究以十进制表述收入有其重要之处，原因是尽管这种做法在高管薪酬合同、分析师预测和管理预测的目标收入设定中十分普遍，但过去从未有这方面的研究。我们的研究亦指出，实现这些目标的压力为以十进制单位来汇报收入的做法提供了一种解释。然而，这些激励效应并不能提供完整的解释，因为即使没有这些明确的目标，仍会以十进制单位作为达标门槛。我们进一步发现，当公司首次达到以十进制单位的门槛时，不论有否达到其他目标，其新闻报导篇幅、机构持份、流动性和分析师关注度都会有所增加。这些结果表明，管理层会为了提高公司的整体知名度来达成以十进制作为单位的目标。总体而言，研究显示了对本质上没有经济意义的十进制数字的偏好，并对市场参与者的行为具有可衡量的影响。这些研究结果为以往尚未探索过的一系列管理目标敞开了大门。