Bank loan spread and private information: pending approval patents

• 成果类型: Article
• 署名作者: Plumlee, Marlene; Xie, Yuan; Yan, Meng; Yu, Jeff Jiewei
• 署名单位: Utah System of Higher Education; University of Utah; Fordham University; Texas A&M University System; Texas A&M University College Station
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-014-9304-9
• 发表日期: 2015
• 页码: 593-638
• 关键词: research-and-development; VALUE-RELEVANCE; cost; disclosure; uncertainty; earnings; MARKET; performance; COMPETITION; INNOVATION

摘要

This study examines a specific source of lenders' ex ante information advantage, private information about borrowers' forthcoming patents. We examine this setting to provide evidence of the impact of such private information on borrowers' cost of debt. We find evidence consistent with lenders incorporating private information by charging borrowers with forthcoming patents a lower spread than borrowers that lack that private information. We document a negative association between loan spread and the citation count on forthcoming patents, consistent with borrowers providing lenders with detailed information regarding future expected cash flows from forthcoming patents and lenders responding through a reduction in interest costs for those borrowers. We also show that the reduction in loan spreads is related to the expected value of the forthcoming patent and is greater for borrowers with higher initial information uncertainty and default risk, and when the lead lender has greater loan concentration in the borrower's industry. Our results suggest that forthcoming patents are a significant source of private information useful to borrowers and employed by lenders.