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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
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Employee Treatment and Contracting with Bank Lenders: An Instrumental Approach for Stakeholder Management, Journal of Business Ethics 4 ; September (2019). Francis, Bill; Hasan, Iftekhar; Liu, Liuling; Wang, Haizhi

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; Liu, Liuling; Wang, Haizhi 
Number of authors
Status Published
Year of publication 2019 
Date 15.09.2019 
Name of article Employee Treatment and Contracting with Bank Lenders: An Instrumental Approach for Stakeholder Management 
Name of journal Journal of Business Ethics
Volume of issue 158 
Number of issue 4 ; September 
Pages 1029-1046 
Abstract Adopting an instrumental approach for stakeholder management, we focus on two primary stakeholder groups (employees and creditors) to investigate the relationship between employee treatment and loan contracts with banks. We find strong evidence that fair employee treatment reduces loan price and limits the use of financial covenants. In addition, we document that relationship bank lenders price both the levels and changes in the quality of employee treatment, whereas first-time bank lenders only care about the levels of fair employee treatment. Taking a contingency perspective, we find that industry competition and firm asset intangibility moderate the relationship between good human resource management and bank loan costs. The cost reduction effect of fair employee treatment is stronger for firms operating in a more competitive industry and having higher levels of intangible assets.
Free text descriptor in Finnish pankit; luotot; kustannukset; yritykset; henkilöstö; sidosryhmät 
Free text descriptor in English Employee treatment, Stakeholder management, Instrumental approach, Cost of bank loans, Loan covenants 
ISSN / e-ISSN 0167-4544 
auki Internet addresses
Additional information First Online: 27 October 2017
Open Access Not known