TY - JOUR
T1 - Ownership dispersion across large shareholders and loan-syndicate structure
AU - Chandera, Yane
AU - Setia-Atmaja, Lukas
AU - Utama, Cynthia Afriani
AU - Husodo, Zaäfri Ananto
N1 - Publisher Copyright:
© 2020 Elsevier B.V.
PY - 2021/1
Y1 - 2021/1
N2 - This study tests the relationship between ownership dispersion across large shareholders and the structure of loan syndicates. The results of an analysis of a set of bank loan contracts that were extended to Indonesian listed firms, from 1992 to 2016, show that an uneven ownership distribution between the largest controlling shareholder and multiple large shareholders is associated with a smaller and more concentrated syndicate. In line with the agency and moral hazard theoretical framework, the results suggest that in a weak legal system, when banks are lending to companies that are at a high risk of expropriation, they decrease the syndicate size and increase the syndicate concentration in order to intensify their efforts in due diligence and monitoring.
AB - This study tests the relationship between ownership dispersion across large shareholders and the structure of loan syndicates. The results of an analysis of a set of bank loan contracts that were extended to Indonesian listed firms, from 1992 to 2016, show that an uneven ownership distribution between the largest controlling shareholder and multiple large shareholders is associated with a smaller and more concentrated syndicate. In line with the agency and moral hazard theoretical framework, the results suggest that in a weak legal system, when banks are lending to companies that are at a high risk of expropriation, they decrease the syndicate size and increase the syndicate concentration in order to intensify their efforts in due diligence and monitoring.
KW - Loan monitoring
KW - Multiple large shareholders
KW - Ownership dispersion
KW - Syndicate concentration
KW - Syndicate size
UR - http://www.scopus.com/inward/record.url?scp=85092515302&partnerID=8YFLogxK
U2 - 10.1016/j.ribaf.2020.101334
DO - 10.1016/j.ribaf.2020.101334
M3 - Article
AN - SCOPUS:85092515302
VL - 55
JO - Research in International Business and Finance
JF - Research in International Business and Finance
SN - 0275-5319
M1 - 101334
ER -