The impact of corporate fraud on ...
Type de document :
Compte-rendu et recension critique d'ouvrage
DOI :
Titre :
The impact of corporate fraud on director-interlocked firms: Evidence from bank loans
Auteur(s) :
Lai, Tat-Kei [Auteur]
Lille économie management - UMR 9221 [LEM]
Lei, Adrian C.H. [Auteur]
Song, Frank [Auteur]
Lille économie management - UMR 9221 [LEM]
Lei, Adrian C.H. [Auteur]
Song, Frank [Auteur]
Titre de la revue :
Journal of business finance & accounting
Pagination :
32-67
Date de publication :
2019-01
Discipline(s) HAL :
Sciences de l'Homme et Société/Economies et finances
Résumé en anglais : [en]
We examine the impact of corporate fraud committed by one firm (the “fraudulent firm”) on other firms with interlocking directors (the “interlocked firms”), focusing on the debtholder side. We argue that the revelation of ...
Lire la suite >We examine the impact of corporate fraud committed by one firm (the “fraudulent firm”) on other firms with interlocking directors (the “interlocked firms”), focusing on the debtholder side. We argue that the revelation of a fraudulent firm's fraud can damage the reputation of the interlocked firms because corporate governance can propagate via director interlocks. Empirically, we find that the interlocked firms' cost of debt is higher and the loan covenants become stricter after the fraud cases of the fraudulent firms are revealed. Consistent with the corporate governance propagation explanation, our results are weaker (stronger) for interlocked firms that have better (worse) pre‐event corporate governance standards. Our findings suggest that corporate fraud of fraudulent firms can affect other firms through director‐interlocks beyond shareholder value.Lire moins >
Lire la suite >We examine the impact of corporate fraud committed by one firm (the “fraudulent firm”) on other firms with interlocking directors (the “interlocked firms”), focusing on the debtholder side. We argue that the revelation of a fraudulent firm's fraud can damage the reputation of the interlocked firms because corporate governance can propagate via director interlocks. Empirically, we find that the interlocked firms' cost of debt is higher and the loan covenants become stricter after the fraud cases of the fraudulent firms are revealed. Consistent with the corporate governance propagation explanation, our results are weaker (stronger) for interlocked firms that have better (worse) pre‐event corporate governance standards. Our findings suggest that corporate fraud of fraudulent firms can affect other firms through director‐interlocks beyond shareholder value.Lire moins >
Langue :
Anglais
Vulgarisation :
Non
Collections :
Source :