Chung, H. M., Chiu, J. M., Li, Y. H., and Hung, C. M. 2021. Research of Organization Capital and Bank Loan Contracts: The Role of Managerial Ability. NTU Management Review, 31 (2): 63-100. https://doi.org/10.6226/NTUMR.202108_31(2).0003
Hui-Min Chung, Department of Information Management and Finance, National Yang Ming Chiao Tung University, Sustainability Leadership Research Center
Jun-Mao Chiu, Department of Finance, National Sun Yat-sen University
Yi-Hua Li, Department of Finance, Chung Yuan Christian University
Chun-Min Hung, Department of Information Management and Finance, National Yang Ming Chiao Tung University
Abstract
This study investigates the impact of organization capital on the bank loan contracts, using the data of the U.S. listed companies (1985-2016). This study explores the impact of organizational capital through the different variables related to bank loan contracts. Among them, bank loan variables include bank loan spread, loan maturity date, security, number of general contracts, and number of financial contracts. This study shows that a higher organization capital is associated with lower bank loan spread, security, and general covenants. Further robustness checks support these empirical results. We also confirm that higher organization capitals can reduce bank loan spreads when firms have better managerial abilities.
Keywords
organization capitalbank loan costsmanagerial ability