Management quality and the cost of debt: Does management matter to lenders?

Rahaman, Mohammad M.; Zaman, Ashraf Al

doi:10.1016/j.jbankfin.2012.10.011

Cited by 49 publications

(23 citation statements)

References 78 publications

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“…As such, MQP at the plant level will not only achieve and sustain a competitive advantage (Flynn, Schroeder, and Sakakibara, 1994), but will also signal the firm's commitment to high management quality and continuous improvement. This, in turn, reduces the firm's financing frictions and results in better access to external financing (e.g., Rahaman and Al Zaman, 2013). This, in turn, reduces the firm's financing frictions and results in better access to external financing (e.g., Rahaman and Al Zaman, 2013).…”

Section: Mqp and Icfsmentioning

confidence: 99%

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Organizational Capital and Investment‐Cash Flow Sensitivity: The Effect of Management Quality Practices

Attig¹,

Cleary

2014

Financial Management

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This paper examines the influence of organizational capital, as evident in management quality practices, on the response of firm investment to internal cash flows. We provide novel and strong evidence that investment sensitivity to internal cash flows decreases in the presence of superior management practices. We also find that superior management practices reduce the firm's financing frictions, evident in lower capital constraints. Our results are robust to numerous tests. Overall, our findings suggest that intangible organizational capital is important for investment decisions and that superior management practices contribute to value‐maximizing behavior.

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Section: Mqp and Icfsmentioning

confidence: 99%

“…4 The discussion above suggests that the output and the top management routes will likely improve the firm's information quality. This, in turn, reduces the firm's financing frictions and results in better access to external financing (e.g., Rahaman and Al Zaman, 2013).…”

Section: Mqp and Icfsmentioning

confidence: 99%

Organizational Capital and Investment‐Cash Flow Sensitivity: The Effect of Management Quality Practices

Attig¹,

Cleary

2014

Financial Management

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“…Sở hữu nước ngoài: Khi nghiên cứu các doanh nghiệp sản xuất quy mô vừa ở Mỹ, [21] thấy rằng các doanh nghiệp có sở hữu nước ngoài thường có bộ máy quản lý hoạt động tốt hơn, thông tin công bố minh bạch hơn so với các loại hình sở hữu doanh nghiệp khác, do đó chi phí nợ của các doanh nghiệp có sở hữu nước ngoài thấp hơn. Ngoài ra, các doanh nghiệp có sở hữu nước ngoài có uy tín trong việc vay nợ hơn, nên họ thường thu hút được các nguồn vốn có chi phí nợ thấp [11].…”

Section: H1: Sở Hữu Nhà Nước Tăng Sẽ Làm Giảm Chi Phí Nợ Của Doanh Ngunclassified

“…Do đó, vấn đề thông tin bất cân xứng giữa các doanh nghiệp có quy mô lớn và người cho vay cũng giảm đi. Điều này giúp cho các doanh nghiệp quy mô lớn có thể thu hút nguồn vốn vay với chi phí thấp hơn [21]. Những bằng chứng thực nghiệm của [2,6] đều cho kết quả tương tự.…”

Section: H2: Sở Hữu Nước Ngoài Tăng Sẽ Làm Giảm Chi Phí Nợ Của Doanh unclassified

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Factors affecting cost of debt of companies listed on Ho Chi Minh S tock Exchange

Yen

Thanh

Loc

2019

Sci. Tech. Dev. J. Econ. Law. Manag.

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Cost of debt is one of factors that firms consider when making their financing decision. Firms use more debt for their operating business in case of lower debt cost. Therefore, determing the impact factors on cost debt is interested in by firms and scholars. This study uses samples of 313 listed firms on Ho Chi Minh Stock exchange over period 2012 to 2017. The finding is that foreign ownership, state ownership, and financing leverage adversely affect on debt cost, while average 12-month interest positively impacts on the cost of debt.

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The effect of environmental, social, and governance disclosure and real earning management on the cost of financing

Amarna,

Garde Sánchez,

López‐Pérez

et al. 2024

Corp Soc Responsibility Env

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This study identifies if sustainable development practices measured through ESG information disclosure are related to stakeholder confidence, leading to a lower cost of debt and equity financing. We also investigate the possible moderating role of real earnings management. We apply a fixed effects panel data analysis to 1659 firm‐year observations of 177 European companies from 2010 to 2019. The results show that investors value ESG disclosure negatively and increase the cost of equity, whereas lenders value it positively and reduce the cost of debt. In addition, when the moderating effect of real earnings management is introduced, the effect of ESG disclosure on the cost of debt decreases, and the effect of ESG disclosure on the cost of equity is reinforced by increasing it. In the presence of real earnings management, investors and lenders seem to think companies use ESG disclosure to legitimise their practices or mislead financing providers.

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Management quality and the cost of debt: Does management matter to lenders?

Cited by 49 publications

References 78 publications

Organizational Capital and Investment‐Cash Flow Sensitivity: The Effect of Management Quality Practices

Organizational Capital and Investment‐Cash Flow Sensitivity: The Effect of Management Quality Practices

Factors affecting cost of debt of companies listed on Ho Chi Minh S tock Exchange

The effect of environmental, social, and governance disclosure and real earning management on the cost of financing

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