Social Capital and Debt Contracting: Evidence from Bank Loans and Public Bonds

Iftekhar Hasan, Chun Keung Hoi, Qiang Wu, Hao Zhang*

*Bijbehorende auteur voor dit werk

OnderzoeksoutputAcademicpeer review

85 Citaten (Scopus)

Samenvatting

We find that firms headquartered in U.S. counties with higher levels of social capital incur lower bank loan spreads. This finding is robust to using organ donation as an alternative social capital measure and incremental to the effects of religiosity, corporate social responsibility, and tax avoidance. We identify the causal relation using companies with a social-capital-changing headquarters relocation. We also find that high-social-capital firms face loosened nonprice loan terms, incur lower at-issue bond spreads, and prefer public bonds over bank loans. We conclude that debt holders perceive social capital as providing environmental pressure that constrains opportunistic firm behaviors in debt contracting.

Originele taal-2English
Pagina's (van-tot)1017-1047
Aantal pagina's31
TijdschriftJournal of Financial and Quantitative Analysis
Volume52
Nummer van het tijdschrift3
DOI's
StatusPublished - jun-2017
Extern gepubliceerdJa

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