Abstract

http://ssrn.com/abstract=1727752
 
 

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Corporate Ownership Structure and Bank Loan Syndicate Structure


Chen Lin


University of Hong Kong - Faculty of Business and Economics

(马跃) Yue Ma


City University of Hong Kong (CityUHK) - Department of Economics & Finance

Paul H. Malatesta


University of Washington - Michael G. Foster School of Business

Yuhai Xuan


Harvard Business School

March 7, 2011

Journal of Financial Economics (JFE), Vol. 104, No. 1, 2012
AFA 2012 Chicago Meetings Paper

Abstract:     
This paper examines the relation between corporate ownership structure and bank loan syndicate structure. We find that the divergence between control rights and cash-flow rights of a borrowing firm's largest ultimate owner has a significant impact on the concentration and composition of the firm’s loan syndicate. When the control-ownership divergence is large, lead arrangers form syndicates with structures that facilitate enhanced due diligence and monitoring efforts. These syndicates tend to be relatively concentrated and comprised of domestic banks that are geographically close to the borrowing firms and that have lending expertise related to the industries of the borrowers. We also examine factors that influence the relation between ownership structure and syndicate structure, including firm opacity, presence of multiple large owners, bank reputation, lending relationship, law and institution, and financial crises.

Number of Pages in PDF File: 51

Keywords: Ownership Structure, Syndicated Loan, Excess Control Rights

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Date posted: December 18, 2010 ; Last revised: May 22, 2013

Suggested Citation

Lin, Chen and Ma, (马跃) Yue and Malatesta, Paul H. and Xuan, Yuhai, Corporate Ownership Structure and Bank Loan Syndicate Structure (March 7, 2011). Journal of Financial Economics (JFE), Vol. 104, No. 1, 2012; AFA 2012 Chicago Meetings Paper. Available at SSRN: http://ssrn.com/abstract=1727752 or http://dx.doi.org/10.2139/ssrn.1727752

Contact Information

Chen Lin
University of Hong Kong - Faculty of Business and Economics ( email )
Pokfulam Road
Hong Kong
China
Yue Ma
City University of Hong Kong (CityUHK) - Department of Economics & Finance ( email )
83 Tat Chee Avenue
Kowloon
Hong Kong
HOME PAGE: http://www.cb.cityu.edu.hk/staff/yuema24
Paul H. Malatesta (Contact Author)
University of Washington - Michael G. Foster School of Business ( email )
Box 353200
Seattle, WA 98195-3200
United States
Yuhai Xuan
Harvard Business School ( email )
Baker Library 347
Boston, MA 02163
United States
617-495-5348 (Phone)
HOME PAGE: http://www.people.hbs.edu/yxuan/
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