Information Asymmetry, Takeover Activities, Syndicate Structure: Evidence from the Financial Service Industry in Germany
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Our empirical analysis is based on a theoretical model that explores the link between informational transparency and the structure of the lending syndicate. Focusing on the bank-based system, we analyze how information asymmetry between German borrowers and lenders affects the mandated arranger's decision for the size of loan syndicate. Following Lee and Mullineaux (2004) and Sufi (2007), we exploit variation in the credit availability of borrowing firms to explain how information asymmetry affects the structure of syndicates. A lack of information transparency induces a mandated arranger to form smaller syndicates in order to enhance monitoring of the German borrowers. Takeover-related loans are associated with smaller size of syndicates, because German borrowers are sensitive to potential information leakage in the case of takeovers. By enhancing our understanding of the factors that improve the salability of debt claims in Germany, our research can contribute to the potential policy debate about the design of financial services that will promote and facilitate the economic development of Korea.
Abstract
Our empirical analysis is based on a theoretical model that explores the link between informational transparency and the structure of the lending syndicate. Focusing on the bank-based system, we analyze how information asymmetry between German borrowers and lenders affects the mandated arranger's decision for the size of loan syndicate. Following Lee and Mullineaux (2004) and Sufi (2007), we exploit variation in the credit availability of borrowing firms to explain how information asymmetry affects the structure of syndicates. A lack of information transparency induces a mandated arranger to form smaller syndicates in order to enhance monitoring of the German borrowers. Takeover-related loans are associated with smaller size of syndicates, because German borrowers are sensitive to potential information leakage in the case of takeovers. By enhancing our understanding of the factors that improve the salability of debt claims in Germany, our research can contribute to the potential policy debate about the design of financial services that will promote and facilitate the economic development of Korea.
참고문헌 (16)
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