Political connections, bailout in financial markets and firm value
Political connections, bailout in financial markets and firm value
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DOI：
10.1016/j.jcorpfin.2016.12.001
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发表时间：
2016-12
影响因子：
6.1
通讯作者：
S. Banerji;Meryem Duygun;M. Shaban
中科院分区：
文献类型：
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作者：
S. Banerji;Meryem Duygun;M. Shaban
论文表明，以救助借款公司的形式对金融市场进行的出于政治动机的干预，降低了银行收集有关公司项目的有价值信息的动机。这种信息损失是一种隐性成本，会对公司价值产生不利影响。公司投入资源，并向有政治关系的人(BOD或其他人员)支付溢价。这种联系具有双重目的，即对冲和提高以银行贷款为抵押的抵押品的价值。由于感到安全，银行失去了监控借款公司的动机。因此，来自政治关联的救助的财富效应部分被银行贷款带来的有价值信息的损失所抵消。在均衡情况下，政治关系的收益与基于信息的银行监管造成的损失的成本之间的权衡取决于(1)国家的信息披露法律，(2)政治环境，(3)建立关系所支付的溢价，以及(4)经济状况。
The paper shows that politically motivated interventions in the financial market in the form of bailing out borrowing firms reduce banks' incentives to gather valuable information about firms' projects. This loss of information is a hidden cost which adversely affects firm value. Firms invest resources and pay a premium to politically connected persons (BOD or other personnel). Such connections serve the twin purposes of hedging and enhancement of the value of collateral pledged against bank loans. Feeling secured, banks lose incentives to monitor borrowing firms. Thus, wealth effect of bailout from political connection is partially offset by the losses of valuable information brought about by bank lending. In equilibrium, the trade-off from gains out of political connections and costs due to losses from information-based bank monitoring depend on (i) the country's disclosure laws, (ii) the political environment, (iii) the premium paid to form connections, and (iv) the state of the economy.