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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
      
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Private benefits of control and bank loan contracts, Journal of Corporate Finance April (2018). Lin, Chih-Yung ; Tsai, Wei-Che; Hasan, Iftekhar; Tuan, Le Quoc


Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
All authors as text Lin, Chih-Yung ; Tsai, Wei-Che; Hasan, Iftekhar; Tuan, Le Quoc 
Number of authors
Status Published
Year of publication 2018 
Date 15.04.2018 
Name of article Private benefits of control and bank loan contracts 
Name of journal Journal of Corporate Finance
Volume of issue 49 
Number of issue April 
Pages 324-343 
Abstract This paper investigates whether or not private benefits of control by managers and large shareholders influence the financing cost of firms. Evidence shows that lending banks demand a significantly higher loan spread, higher fees, shorter loan maturity, smaller loan size, stricter covenants, and greater collateral on firms with greater private benefits of control. Results are stronger for firms with weak corporate governance quality, supporting the agency cost viewpoint. Such evidence implies that banks consider higher private benefits of control as a type of agency problem when they make lending decisions.
Free text descriptor in Finnish yritykset; rahoitus; omistajaohjaus; kustannukset; luotot; 
Free text descriptor in English Private benefits of control; Agency problem; Bank loan spread; Non-price terms; Corporate governance 
JEL-codes G21; G32; G34 
ISSN / e-ISSN 0929-1199 
auki Internet addresses
Additional information Available online 31 January 2018.
Open Access Not open