Does institutional ownership affect the cost of bank borrowing?

Journal of Economics and Business

Volumn 62, Issue 6, 2010, Pages 604-626

  Roberts, Gordon ^a   Yuan, Lianzeng Edward ^b  

^a YORK UNIVERSITY   (Canada)

^b International Arbitration and Litigation Practice   (United States)

Author keywords

Corporate governance; Loan pricing

Indexed keywords

EID: 78649449436     PISSN: 01486195     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jeconbus.2009.05.002     Document Type: Article

References (53)

1. Agrawal A., Knoeber C.R. Firm performance and mechanisms to control agency problems between managers and shareholders. Journal of Financial and Quantitative Analysis 1996, 31:377-397.
2. Anderson R.C., Mansi S.A., Reeb D.M. Founding family ownership and the agency cost of debt. Journal of Financial Economics 2003, 68:263-285.
3. Angbazo L., Mei J., Saunders A. Credit spreads in the market for highly leveraged transaction loans. Journal of Banking and Finance 1998, 22:1249-1282.
4. Bhojraj S., Sengupta P. Effect of corporate governance on bond ratings and yields: The role of institutional investors and outside directors. Journal of Business 2003, 76:455-475.
5. Black B.S. Shareholder passivity reexamined. Michigan Law Review 1990, 88:520-608.
6. Bradley, M., & Roberts, R. R. (2003). Are debt covenants priced? Working paper. Duke University.
7. Chava, S., Dierker, M., & Livdan, D. (2005). Do shareholder rights affect the cost of bank loans? Working paper. University of Houston.
8. Chung R., Firth M., Kim J. Institutional monitoring and opportunistic earnings management. Journal of Corporate Finance 2002, 8:29-48.
9. Clay, D. G. (2002). Institutional ownership and firm value. Working paper.
10. Coffee J. Liquidity versus control: The institutional investor as corporate monitor. Columbia Law Review 1991, 91:1277-1368.
11. Coleman, A. D. F., Esho, N. & Sharpe, I. G. (2004). Does bank monitoring influence loan contract terms? Working paper.
12. Conference Board (2003). Institutional investor report.
13. Cook R.D. Influential observations in linear regression. Journal of the American Statistical Association 1979, 74:169-174.
14. Cornett, M. M., Marcus, A. J., Saunders, A. & Tehranian, H. (2003). The impact of institutional ownership on corporate operating performance. Working paper.
15. Demsetz H., Lehn K. The structure of corporate ownership: Causes and consequences. Journal of Political Economy 1985, 93:1155-1177.
16. Dennis S., Nandy D., Sharpe I.G. The determinants of contract terms in bank revolving credit agreements. Journal Financial and Quantitative Analysis 2000, 35:87-110.
17. Diamond D.W. Financial intermediation and delegated monitoring. The Review of Economic Studies 1984, 51:393-414.
18. Diamond D.W. Reputation acquisition in debt markets. Journal of Political Economy 1989, 97:828-862.
19. Drucker S., Puri M. On loan sales, loan contracting, and loan relationships. Review of Financial Studies 2009, 22:2835-2872.
20. Duggal R., Miller J.A. Institutional ownership and firm performance: The case of bidder returns. Journal of Corporate Finance 1999, 5:103-117.
21. Esty, Benjamin C. Structuring loan syndicates: A case study of the Hong Kong Disneyland project loan. Journal of Applied Corporate Finance 2001, 14(3):80-95.
22. Faccio M., Lasfer M.A. Do occupational pension funds monitor companies in which they hold large stakes?. Journal of Corporate Finance 2000, 6:71-110.
23. Fama E., Miller M. The theory of finance 1972, Dryden Press, Hinsdale, IL.
24. Gompers P., Metrick A. Institutional investors and equity prices. Quarterly Journal of Economics 2001, 116:229-259.
25. Gompers P., Ishii J.L., Metrick A. Corporate governance and equity prices. Quarterly Journal of Economics 2003, 118:107-155.
26. Gottesman A.A., Roberts G.S. Maturity and corporate loan pricing. Financial Review 2004, 38:55-77.
27. Hartzell J.C., Starks L.T. Institutional investors and executive compensation. The Journal of Finance 2003, 58:2351-2374.
28. Helwege J., Turner C.M. The slope of the credit yield curve for speculative-grade issuers. Journal of Finance 1999, 54:1869-1884.
29. Hubbard R.G., Kuttner K.N., Palia D.N. Are there "Bank Effect" in borrowers' costs of funds? Evidence from a matched sample of borrower and banks. Journal of Business 2002, 75:559-581.
30. Inderst, R. & Müller, H. M. (1999). Ownership concentration, monitoring and the agency cost of debt. Working paper. University of Mannheim.
31. Jennings W.W. Further evidence on institutional ownership and corporate value. Advances in Financial Economics 2005, 11:171-211.
32. Jensen M., Meckling W. Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics 1976, 3:305-360.
33. Johnson S. Debt maturity and the effects of growth opportunities and liquidity risk on leverage. Journal of Financial Studies 2003, 16:209-236.
34. Kalay A. Stockholder-bondholder conflict and dividend constraints. Journal of Financial Economics 1982, 10:211-233.
35. Karpoff J., Malatesta P., Walking R. Corporate governance and shareholder initiatives: Empirical evidence. Journal of Financial Economics 1996, 42:365-395.
36. Klock M.S., Mansi S.A., Maxwell W.F. Does corporate governance matter to bondholders?. Journal of Financial and Quantitative Analysis 2005, 40:693-719.
37. Lehn K., Poulsen A. Contractual resolution of bondholder-stockholder conflicts in leveraged buyouts. Journal of Law and Economics 1991, 34:645-673.
38. Maxwell W., Rao R. Do spin-offs expropriate wealth from bondholders?. The Journal of Finance 2003, 58:2087-2108.
39. Maxwell W., Stephens C. The wealth effects of repurchases on bondholders. The Journal of Finance 2003, 58:895-919.
40. Merton R. On the pricing of corporate debt: The risk structure of interest rates. The Journal of Finance 1974, 29:449-470.
41. Myers S. Determinants of corporate borrowing. Journal of Financial Economics 1977, 5:147-175.
42. Parrino R. Spin-offs and wealth transfers: The Marriott case. Journal of Financial Economics 1997, 43:241-274.
43. Parrino R., Weisbach M.S. Measuring investment distortions arising from stockholder-bondholder conflicts. Journal of Financial Economics 1999, 53:3-42.
44. Parrino R., Sias R.W., Starks L.T. Voting with their feet: Institutional ownership changes around forced CEO turnover. Journal of Financial Economics 2003, 68:3-46.
45. Preece D.C., Mullineaux D.J. Monitoring, loan renegotiability, and firm value: The role of lending syndicates. Journal of Banking and Finance 1996, 20:577-593.
46. Rajan R.G. Insiders and outsiders: The choice between informed and arm's-length debt. The Journal of Finance 1992, 47:1367-1400.
47. Rajgopal, S., & Venkatachalam, M. (1998). The role of institutional investors in corporate governance: An empirical analysis. Working paper.
48. Smith C., Warner J. On financial contracting: An analysis of bond covenants. Journal of Financial Economics 1979, 7:117-161.
49. Sougiannis T., Amir E., Lev B. Do financial analysts get intangibles?. European Accounting Review 2003, 12:635-659.
50. Strahan, P. E. (1999). Borrower risk and the price and nonprice terms of bank loans. Working paper. Boston College.
51. Taylor W. Can big owners make a big difference?. Howard Business Review 1990, 70-82.
52. Thomson Reuters (2008, Third Quarter). Equity capital markets. http://banker.thomsonib.com/.
53. White H. A heteroskedasticity-consistent covariance matrix estimator and a direct rest for heteroskedasticity. Econometrica 1980, 48(4):817-838.