Major government customers and loan contract terms
成果类型：
Article
署名作者：
Cohen, Daniel; Li, Bin; Li, Ningzhong; Lou, Yun
署名单位：
Texas A&M University System; Texas A&M University College Station; University of Houston System; University of Houston; University of Texas System; University of Texas Dallas; Singapore Management University
刊物名称：
REVIEW OF ACCOUNTING STUDIES
ISSN/ISSBN：
1380-6653
DOI：
10.1007/s11142-021-09588-7
发表日期：
2022
页码：
275-312
关键词：
摘要：
We examine the relation between the presence of U.S. government as a major customer and a supplier firm's loan contract terms, using major corporate customers as a benchmark. We find that firms with major government customers are associated with fewer covenants and a lower likelihood of having performance pricing provisions in their loan contracts. In contrast, we do not find such associations for firms with major corporate customers. Further, we find no evidence that the existence of major government customers is related to the supplier firm's loan spread, security, or maturity. We conjecture that lenders benefit from the stricter monitoring of the government as a major customer and thus use fewer covenants and performance pricing provisions when lending to firms with major government customers than when lending to those with major corporate customers. We provide evidence consistent with this conjecture.
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