LI Xiaorong，etc：Can CEO Power Influence Loan Decision of Banks?

Abstract：The economic consequences of corporate executive power, especially CEO power, have become the focus and hot issue of corporate finance. This paper mainly studies whether bank credit decision will take CEO power and the effects enterprise property rights on the relationship between CEO power and bank loan into consideration. The paper indicates that:(1)the increase of CEO power will significantly reduce the volume of bank loans;(2)compared with long-term loans, banks are more willing to give enterprise with more powerful CEO short-term loans;(3)properties of state-owned enterprises significantly reduce negative correlation relationship between CEO power and the bank loan. Further research also shows that the negative correlation between CEO power and bank loan exists in economic downward period. When companies also get listed in Hong Kong at the same time, negative correlation between CEO power and bank loans diminishes. The above conclusions show that CEO power is an important factor influencing the bank loan contract. This paper enriches the research field of CEO power and the bank loan, and has important enlightenment for enterprises to obtain bank loans and bank credit contract.

Key words： CEO Power    Bank Loan    Enterprise Property Rights

source:Finance & Trade Economics ,No.7,2015