Are firm- and country-specific governance substitutes? Evidence from financial contracts in emerging markets
Document Type
Article
Publication Date
9-1-2012
Abstract
We investigate how borrowers' corporate governance influences bank loan contracting terms in emerging markets and how this relation varies across countries with different country-level governance. We find that borrowers with stronger corporate governance obtain favorable contracting terms with respect to loan amount, maturity, collateral requirements, and spread. Firm-level and country-level corporate governance are substitutes in writing and enforcing financial contracts. We also find that the distinctiveness of borrowers' characteristics affect the relation between firm-level corporate governance and loan contracting terms. Our findings are robust, irrespective of types of regression methods and specifications. © 2012 The Southern Finance Association and the Southwestern Finance Association.
Publication Title
Journal of Financial Research
Recommended Citation
Francis, B.,
Hasan, I.,
&
Song, L.
(2012).
Are firm- and country-specific governance substitutes? Evidence from financial contracts in emerging markets.
Journal of Financial Research,
35(3), 343-374.
http://doi.org/10.1111/j.1475-6803.2012.01320.x
Retrieved from: https://digitalcommons.mtu.edu/michigantech-p/11391
