The DOI matches its Crossref record; 10 of the 10 references it cites were found in a registry or an index.
The Supply‐Side Determinants of Loan Contract Strictness
Open accessAbstract
Using a measure of contract strictness based on the probability of a covenant violation, I investigate how lender‐specific shocks impact the strictness of the loan contract that a borrower receives. Banks write tighter contracts than their peers after suffering payment defaults to their own loan portfolios, even when defaulting borrowers are in different industries and geographic regions from the current borrower. The effects persist after controlling for bank capitalization, although bank equity compression is also associated with tighter contracts. The evidence suggests that recent defaults inform the lender's perception of its own screening ability, thereby impacting its contracting behavior.
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Cites
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Cited by
Endogeneity in Empirical Corporate Finance1
Roberts, M. R., & Whited, T. M. (2013) · Handbook of the Economics of Finance · doi:10.1016/b978-0-44-453594-8.00007-0 · Cited by 2,459
Political uncertainty and bank loan contracting
Francis, B. B., Hasan, I., & Zhu, Y. (2014) · Journal of Empirical Finance · doi:10.1016/j.jempfin.2014.08.004 · Cited by 388
Acharya, V., Davydenko, S. A., & Strebulaev, I. A. (2012) · Review of Financial Studies · doi:10.1093/rfs/hhs106 · Cited by 375
Anatomy of Corporate Borrowing Constraints*
Lian, C., & Ma, Y. (2020) · The Quarterly Journal of Economics · doi:10.1093/qje/qjaa030 · Cited by 373
Measuring the probability of financial covenant violation in private debt contracts
Demerjian, P. R., & Owens, E. L. (2016) · Journal of Accounting and Economics · doi:10.1016/j.jacceco.2015.11.001 · Cited by 313
Metadata
- Authors
- MURFIN, J.
- Venue
- The Journal of Finance
- Publisher
- Wiley
- Published
- 2012-09-12
- Volume
- 67
- Issue
- 5
- Pages
- 1565-1601
- ISSN
- 0022-1082 (ISSN-L)
- 1540-6261
- OpenAlex
- W3122332694
- Cited by
- 443
- References
- 10
- FWCI
- 46.70
- Type
- journal article
- Language
- en
- Open access
- green
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
