The Impact of Information Asymmetry, Moral Hazard and the Structure of Funding on Corporate U.S. Dollars Loan Pricing: The Empirical Study in Indonesia the Period 1990-1997

Marciano, Deddy; Husnan, Suad

doi:10.2139/ssrn.2156672

Cited by 1 publication

(1 citation statement)

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“…The economic growth rates in ASEAN countries are considerably high, thus attracting foreign funds flew to Indonesia, Thailand, and Vietnam specifically. The uniqueness of these three countries in the ASEAN region is that they have different market characteristics from the US and Western Europe due to asymmetry of information issues and agency problems, such as moral hazard and adverse selection, thus causing loan pricing models in ASEAN to be different [7].…”

Section: Introductionmentioning

confidence: 99%

Factors Affecting Syndicated Loan Spreads in Indonesia, Thailand, and Vietnam

Bryan¹,

Marciano²,

Ernawati³

et al. 2022

Advances in Economics, Business and Management Research

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This study aims to analyze the effect of loan information (i.e., number of lenders, loan amount, and loan maturity) and borrower characteristics (i.e., public, firm size, leverage, and profitability), as well as control variables such as country and year on syndicated loan, spread in public companies and private companies in Indonesia, Thailand, and Vietnam during the 2008–2018 period by calculating the All In Spread Drawn (AISD) of the syndicated loans over LIBOR. This study applied a quantitative approach through the ordinary least squares method on a sample of 389 observations. A total of 118 observations came from public companies, and 271 observations came from private companies. This study shows that syndicated loans given to private companies are more expensive than public companies. However, this can be minimized by increasing the loan exposure for private firms through a larger number of lenders. It can also be seen that public companies with larger assets, higher returns on equity, and borrowing with shorter terms will be subject to lower interest rates. The spreads for syndicated loans are the most expensive in Indonesia, followed by Vietnam and Thailand.

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Section: Introductionmentioning

confidence: 99%