Bank Loan Announcement Effects — Evidence from a Comprehensive 8-K Sample

PBCSF-NIFR Research Paper

Allied Social Sciences Association ASSA/AEA 2021 Poster

72 Pages Posted: 17 Dec 2019 Last revised: 19 May 2022

See all articles by Steven Wei Ho

Steven Wei Ho

Columbia University, Graduate School of Arts and Sciences, Department of Economics

Clark Liu

Tsinghua University - PBC School of Finance

Shujing Wang

Tongji University

Date Written: May 18, 2021

Abstract

Using a comprehensive sample of over 10,000 bank loan announcements identified from 8-K filings during 1994-2018, we show that bank loan financing continues to convey valuable private information as the regulatory environment changes over time. The positive loan announcement effects are stronger when deals are more material and reveal positive news about firms' financial conditions, when lenders have higher credit quality, and when the credit market condition is tight. Based on a sample that better represents the loan universe, we provide new evidence on the determinants of loan announcement decisions and address the sample misrepresentation concerns raised by previous studies.

Keywords: Bank Loan Announcement; Big Data; 8-K Filings; SEC Form 8-K Disclosure Rules; Dodd-Frank Act

JEL Classification: G14; G18; G21; G32

Suggested Citation

Ho, Steven Wei and Liu, Clark and Wang, Shujing, Bank Loan Announcement Effects — Evidence from a Comprehensive 8-K Sample (May 18, 2021). PBCSF-NIFR Research Paper, Allied Social Sciences Association ASSA/AEA 2021 Poster, Available at SSRN: https://ssrn.com/abstract=3480906 or http://dx.doi.org/10.2139/ssrn.3480906

Steven Wei Ho

Columbia University, Graduate School of Arts and Sciences, Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States

HOME PAGE: http://econ.columbia.edu/steven-ho

Clark Liu (Contact Author)

Tsinghua University - PBC School of Finance ( email )

No. 43, Chengdu Road
Haidian District
Beijing 100083
China

Shujing Wang

Tongji University ( email )

Shanghai
China

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