【12月27日】【会计学院学术论坛】Do Banks Price Director’s Reputation- Evidence from Corporate Financial Fraud发布日期：2019-09-12 21:12:23
讲座主题：Do Banks Price Director’s Reputation? Evidence from Corporate Financial Fraud
摘要：Director’s reputation plays an important role in firm’s contracting with outside parties. However, it is difficult to reasonably measure director’s reputation. This study takes advantage of corporate financial fraud as an exogenous shock to the reputation of directors with multiple directorships and examines whether banks adversely adjust loan spreads in response to the damage to director’s reputation of borrowing firms other than fraud firms. Using a sample of borrowing firms whose director’s reputation was damaged by other firm’s financial fraud, we find that the borrowers face a significantly higher increase in loan spreads after their director’s reputation was damaged by other firm’s financial fraud. The increase in loan spreads is more pronounced if the tainted director holds important financial reporting related board positions in borrowing firms (i.e. CEO or audit committee member) and fraud firms (i.e. audit committee chair and member). The adverse impact of damaged reputation of directors on loan spreads also increases with the fraud severity and information asymmetry faced by banks. We also identify two possible channels through which the damaged reputation of directors increases loan spreads. On the one hand, the damaged reputation of directors weakens the borrower’s credit quality; on the other hand, the damaged reputation of directors attracts more negative media coverage, which discourages the supports from outside resources providers. Additional tests show that banks also adversely adjust other non-price loan terms such as collateral requirement and general covenants when the reputation of borrower’s director was damaged by financial fraud.
讲座人简介：王文明，香港浸会大学助理教授。2011年获得香港浸会大学会计学博士学位。主要研究兴趣为公司治理与公司财务等问题，相关研究成果发表于Journal of Banking and Finance、Financial Management、Journal of Business Ethics等国际著名财务与管理学期刊。