Non-executive Employee Stock Ownership, Corporate Governance, and Debt Pricing
| Project/Area Number |
18K01676
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Multi-year Fund |
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| Section | 一般 |
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| Review Section |
Basic Section 07060:Money and finance-related
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| Research Institution | Hitotsubashi University |
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Principal Investigator |
WEN Min-Ming 一橋大学, 大学院経営管理研究科, 教授 (30792931)
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| Project Period (FY) |
2018-04-01 – 2023-03-31
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| Project Status |
Completed (Fiscal Year 2022)
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| Budget Amount *help |
¥4,160,000 (Direct Cost: ¥3,200,000、Indirect Cost: ¥960,000)
Fiscal Year 2020: ¥1,170,000 (Direct Cost: ¥900,000、Indirect Cost: ¥270,000)
Fiscal Year 2019: ¥1,430,000 (Direct Cost: ¥1,100,000、Indirect Cost: ¥330,000)
Fiscal Year 2018: ¥1,560,000 (Direct Cost: ¥1,200,000、Indirect Cost: ¥360,000)
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| Keywords | non-executive ownership / loan pricing / debt financing cost / Non-executive Ownership / Corporate Governance / Loan spread / loan spread / Non-executive ownership / corporate governance / risk reduction / debt pricing / debt financing |
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| Outline of Final Research Achievements |
One paper derived from this project has been published in a refereed journal. The paper is titled " Non-executive ownership and private loan
pricing" and is published in the Journal of Corporate Finance.
Results of the paper reveal that employee stock ownership may affect loan spreads by improving corporate governance, curbing managerial risk-taking, reducing information asymmetry, and improving employee retention. In contrast, we find that employee ownership via stock options is associated with greater loan spreads, perhaps owing to their convex payoff structure. Overall, our results underscore the importance of the level and structure of employee ownership for pricing corporate loans.
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| Academic Significance and Societal Importance of the Research Achievements |
This paper examines the link between non-executive employee ownership and the terms and pricing of corporate loans. The negative effect of employee stock ownership on loan spreads suggests that non-executive ownership can significantly reduce financing costs using private loans.
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Report
(6 results)
Research Products
(13 results)
