Is language priced? evidence from bank loan contracting

IF 1.4 4区经济学 Q3 BUSINESS, FINANCE

Asia-Pacific Journal of Accounting & Economics Pub Date : 2021-11-19 DOI:10.1080/16081625.2021.2003211

Yanzhi Xie, Chong Wang, Feng Wu

引用次数: 0

Abstract

ABSTRACT Previous studies document that firms in countries speaking languages with strong future time reference (FTR), which more sharply dissociates the future from the present, engage in less future-oriented corporate behaviors relating to their default and information risks. We find that strong FTR influences creditors’ pricing of bank loan contracts: banks design more unfavorable loan terms to strong-FTR borrowers, including larger loan spread, higher likelihood of collateral requirement, and more covenants. This effect can be mitigated by a country’s strong governance. We confirm that strong FTR is associated with higher default and information risks of borrowing firms. Overall, our findings suggest that language represents a distinctive risk to banks which is priced in the loan market.

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语言定价吗?银行贷款合同证明

以往的研究表明，在使用具有强烈未来时间参考(FTR)的语言的国家中，企业在违约和信息风险方面的未来导向企业行为较少。我们发现，强FTR影响债权人对银行贷款合同的定价:银行为强FTR借款人设计了更多不利的贷款条款，包括更大的贷款利差、更高的抵押品要求可能性和更多的契约。这种影响可以通过一个国家强有力的治理来缓解。我们确认，较强的FTR与借款企业较高的违约和信息风险相关。总体而言，我们的研究结果表明，语言对银行来说代表着一种独特的风险，这种风险在贷款市场上定价。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Asia-Pacific Journal of Accounting & Economics Multiple-

CiteScore

2.40

自引率

9.10%

发文量

期刊介绍： The Asia-Pacific Journal of Accounting & Economics (APJAE) is an international forum intended for theoretical and empirical research in all areas of economics and accounting in general. In particular, the journal encourages submissions in the following areas: Auditing, financial reporting, earnings management, financial analysts, the role of accounting information, international trade and finance, industrial organization, strategic behavior, market structure, financial contracts, corporate governance, capital markets, and financial institutions. The journal welcomes contributions related to the Asia Pacific region, and targets top quality research from scholars with diverse regional interests. The editors encourage submission of high quality manuscripts with innovative ideas. The editorial team is committed to an expedient review process.