Choices in financing is an important issue when firms need to leverage. With the giant capital concerned, including the capital structure, investment decision-making, and dividend policy etc., it plays a crucial role for a firm's future. Among the foreign literatures, unlike equity offerings or public debt offerings, bank loan financing elicits a significant positive stock price reaction. The lengthy foreign literature on firm financing decisions relies (in parts) on this finding to characterize bank loans as ¡§unique¡¨ or ¡§special¡¨ forms of external finance. During the process of approval for loan, banks will make a great effort on monitoring and verifying the quality of firm¡¦s credit capability. The information banks get makes bank loan as an important way to reducing the information asymmetry between firms and the investigators.
We further explore the uniqueness of private lending announcement by examining the short-run and the long-run equity performance of bank borrowers. With single-factor model and Fama-French three-factor model, the loan announcement both caused a positive borrowers returns in the short run and long run overall. But there is no cross-sectional effect in the short run. Although the industry variable elicits a significant positive reaction in the long run, it¡¦s only because of the characteristic of the industry, not the loan announcement effects. We conclude that the loan announcement has no influence on the borrowers return
| Identifer | oai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0626103-235043 |
| Date | 26 June 2003 |
| Creators | Lai, Mei-Huah |
| Contributors | Y. Chris Liao, Anlin Chen, Chin-Tarn Lee |
| Publisher | NSYSU |
| Source Sets | NSYSU Electronic Thesis and Dissertation Archive |
| Language | Cholon |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0626103-235043 |
| Rights | not_available, Copyright information available at source archive |
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