Family Control, Foreign Investors, and the Cost of Corporate Borrowing

Corporate Governance;Family Ownership;Foreign Block Investors;Ownership-Control Disparity;Cost of Debt;Syndicated Loans;658

경영대학 경영학과 ;

University:서울대학교 대학원

关键词: Corporate Governance;    Family Ownership;    Foreign Block Investors;    Ownership-Control Disparity;    Cost of Debt;    Syndicated Loans;    658;   

Others  :  http://s-space.snu.ac.kr/bitstream/10371/124421/1/000000009315.pdf

美国|英语

来源: Seoul National University Open Repository

【 摘 要 】

This paper examines whether family CEOs in Korea have an effect on the cost of borrowing. Specifically, we aim to see whether or not the excess control rights that many of these family members hold has an adverse effect on the cost of borrowing, thus lowering shareholder firm value. We compare this to the effect of foreign ownership both as a direct effect on the price of debt and as an interacting variable between family CEOs and interest rates. We obtained loan data for 385 syndicated loan contracts in South Korea issued between 1996 and 2011. The results turned out marginally significant for the positive effect of family CEOs on the cost of borrowing, and significant for the negative effect for foreign ownership on the cost ofborrowing. The interacting effect was not supported.