000			02728cam a22003257 4500
001			w8694
003			NBER
005			20211020113254.0
006			m o d
007			cr cnu||||||||
008			210910s2001 mau fo 000 0 eng d
100	1		_aKroszner, Randall S. _914605
245	1	0	_aThrowing Good Money After Bad? Board Connections and Conflicts in Bank Lending / _cRandall S. Kroszner, Philip E. Strahan.
260			_aCambridge, Mass. _bNational Bureau of Economic Research _c2001.
300			_a1 online resource: _billustrations (black and white);
490	1		_aNBER working paper series _vno. w8694
500			_aDecember 2001.
520	3		_aThis 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 a 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, we first document that banks are heavily involved in the corporate governance network through frequent board linkages. Banks tend to have larger boards with a higher proportion of outside directors than non- financial firms, and bank officer-directors tend to have more external board directorships than executives of non- financial firms. We then show that low- information cost firms -- large firms with a high proportion of tangible assets and relatively stable stock returns -- are most likely to have board connections to banks. These same low- information cost firms are also more likely to borrow from their connected bank, and when they do so the terms of the loan appear similar to loans to unconnected firms. In contrast to studies of Mexico, Russia and Asia where connections have been misused, our results suggest that avoidance of potential conflicts of interest explains both the allocation and behavior of bankers in the U.S. corporate governance system.
530			_aHardcopy version available to institutional subscribers
538			_aSystem requirements: Adobe [Acrobat] Reader required for PDF files.
538			_aMode of access: World Wide Web.
588	0		_aPrint version record
690		7	_aG3 - Corporate Finance and Governance _2Journal of Economic Literature class.
700	1		_aStrahan, Philip E. _921235
710	2		_aNational Bureau of Economic Research.
830		0	_aWorking Paper Series (National Bureau of Economic Research) _vno. w8694.
856	4	0	_uhttps://www.nber.org/papers/w8694
856			_yAcceso en línea al DOI _uhttp://dx.doi.org/10.3386/w8694
942			_2ddc _cW-PAPER
999			_c339498 _d298060