95 NTU Management Review Vol. 31 No. 2 Aug. 2021 4. Empirical Findings and Contributions First, our empirical results indicate that higher organization capital can reduce bank loan spreads. Second, when taking managerial abilities into consideration, we find that companies with better managerial abilities and thus invest more organization capital will also reduce bank loan spreads. Besides, we also perform many robustness tests to examine the influence of organization capital on bank lending costs. The research results still have consistency and support both hypotheses. This paper have two contributions. One of the contribution in this paper, we fills the research gaps on the impact of organization capital on enhancing the efficiency of corporate operations. The literature in recent years pointed out that organizational capital in a company affects corporate M&A performance and post-merger operational performance (Li, Qiu, and Shen, 2018), the difference in stock returns between companies (Eisfeldt and Papanikolaou, 2013), and the sensitivity of investment and cash flow (Atting and Cleary, 2014) and operational performance (Lev et al., 2009). Our empirical results show that if the firm with higher organization capital could reduce the bank loan cost. The main reason is that the investment of organizational capital can bring value creation effects to the company, so banks are willing to provide lower lending costs for companies that invest more organization capital. The second contribution of this research is to supplement the literature on explaining how the managerial abilities affect the relation between organization capital and bank loan spreads. In the past literature, the determinants of bank lending spreads mainly focused on company characteristics and manager characteristics, such as: financial restatement (Graham et al., 2008), earnings forecast (Hasan, Park, and Wu, 2012), stock liquidity (Francis, Hasan, Mani, and Yan, 2016), family ownership (Yen, Lin, Chen, and Huang, 2015), corporate political relevance (Chen, Shen, and Lin, 2014), manager overconfidence (Lin, Chen, Ho, and Yen, 2020), and manager ability (Bui, Chen, Hasan, and Lin, 2018; De Franco et al., 2017). The above-mentioned literature neglects to discuss how the managerial ability affects the investment of intangible assets and bank loans at the same time. The results of this research found that the better the managerial capabilities of the company, and the company invests more organizational capital, the bank will reduce the bank lending spreads.
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