Managerial Overconfidence and Bank Loan Contracting
| dc.contributor.advisor | Newberry, Kaye J. | |
| dc.contributor.committeeMember | Lu, Tong | |
| dc.contributor.committeeMember | Zhao, Yuping | |
| dc.contributor.committeeMember | Langberg, Nisan | |
| dc.creator | Yu, Xiaoou | |
| dc.date.accessioned | 2018-03-02T21:51:26Z | |
| dc.date.available | 2018-03-02T21:51:26Z | |
| dc.date.created | August 2014 | |
| dc.date.issued | 2014-08 | |
| dc.date.submitted | August 2014 | |
| dc.date.updated | 2018-03-02T21:51:26Z | |
| dc.description.abstract | I study the effect of managerial overconfidence on bank loan contracting. I find empirical evidence supporting that overconfidence as a personal trait of borrowing firm’s manager impacts loan contracting terms. Specifically, loans initiated between banks and firms with overconfident managers have significantly lower interest rates on average. However, I also find that overconfident managers are willing to accept a higher initial interest rate if the loan contract includes a performance pricing provision, and that the likelihood of including a performance pricing provision is greater for overconfident managers. These results are consistent with predictions that performance pricing provisions are a useful mechanism for alleviating the agency conflicts arising from managerial overconfidence. Furthermore, I find that managerial overconfidence is associated with higher covenant intensity, longer maturity, and larger loan amounts. For syndicated loans with overconfident managers, lead banks reduce their risk exposure by inviting more participant lenders, retaining lower shares of the loans, and reducing syndicate concentrations. | |
| dc.description.department | Accountancy and Taxation, Department of | |
| dc.format.digitalOrigin | born digital | |
| dc.format.mimetype | application/pdf | |
| dc.identifier.uri | http://hdl.handle.net/10657/2798 | |
| dc.language.iso | eng | |
| dc.rights | The author of this work is the copyright owner. UH Libraries and the Texas Digital Library have their permission to store and provide access to this work. Further transmission, reproduction, or presentation of this work is prohibited except with permission of the author(s). | |
| dc.subject | Managerial overconfidence | |
| dc.subject | Debt Contracts | |
| dc.subject | Loan terms | |
| dc.subject | Loans | |
| dc.title | Managerial Overconfidence and Bank Loan Contracting | |
| dc.type.dcmi | Text | |
| dc.type.genre | Thesis | |
| thesis.degree.college | C. T. Bauer College of Business | |
| thesis.degree.department | Accountancy and Taxation, Department of | |
| thesis.degree.discipline | Accountancy and Taxation | |
| thesis.degree.grantor | University of Houston | |
| thesis.degree.level | Doctoral | |
| thesis.degree.name | Doctor of Philosophy |