Throwing Good Money After Bad? Board Connections and Conflicts in Bank Lending

This paper investigates the frequency of connections between banks and non-financial firms through board linkages and whether those connections affect lending and borrowing behavior. Although board linkages may reduce the costs of information flows between the lender and borrower, a board linkage may generate pressure for special treatment of a borrower not normally justifiable on economic grounds. To address this issue, the paper first documents that banks is heavily involved in the corporate governance network through frequent board linkages.

Provided by: University of Chicago Topic: Software Date Added: Aug 2001 Format: PDF

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