CEO overconfidence and bank loan contracting

Chih Yung Lin, Yehning Chen, Po Hsin Ho, Ju Fang Yen

研究成果: 雜誌貢獻期刊論文同行評審

6 引文 斯高帕斯(Scopus)

摘要

In this paper, we examine the effect of managerial overconfidence on bank loan spreads. Our theoretical model and empirical results support that firms with highly overconfident CEOs have lower loan spreads and that the reducing effect of these CEOs on the spread is more pronounced when the loan contracts have collateral or covenants. Unlike firms with highly overconfident CEOs, firms with moderately overconfident CEOs do not receive lower loan spreads. We perform various tests to alleviate the concerns about endogeneity, and the results are robust. The results are consistent with the idea that highly overconfident CEOs are more willing to pledge collateral and accept covenants in exchange for a reduction in their loan rate.

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文章編號101637
期刊Journal of Corporate Finance
64
DOIs
出版狀態已出版 - 10月 2020

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