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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
      
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Corporate boards and bank loan contracting, Journal of Financial Research 4; Winter (2012). Francis, Bill; Hasan, Iftekhar; Koetter, Michael; Wu, Qiang


Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
All authors as text Francis, Bill; Hasan, Iftekhar; Koetter, Michael; Wu, Qiang 
Number of authors
Status Published
Year of publication 2012 
Date 13.12.2012 
Name of article Corporate boards and bank loan contracting 
Name of journal Journal of Financial Research
Volume of issue 35 
Number of issue 4; Winter 
Pages 521-552 
Abstract We investigate the role of corporate boards in bank loan contracting. We find that when corporate boards are more independent, both price and nonprice loan terms (e.g., interest rates, collateral, covenants, and performance-pricing provisions) are more favorable, and syndicated loans comprise more lenders. In addition, board size, audit committee structure, and other board characteristics influence bank loan prices. However, they do not consistently affect all nonprice loan terms except for audit committee independence. Our study provides strong evidence that banks recognize the benefits of board monitoring in mitigating information risk ex ante and controlling agency risk ex post, and they reward higher quality boards with more favorable loan contract terms.
JEL-codes G21; G34 
ISSN / e-ISSN 0270-2592 
auki Internet addresses
Additional information First published: 13 December 2012
Notes BoF DP 14/2012 


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