The Impact of Incentives and Communication Costs on Information Production and Use: Evidence from Bank Lending
研究中国银行改革后，贷款官员激励增强如何提升内部风险评级对贷款利率和事后结果的预测力，以及沟通成本的影响。
ABSTRACT In 2002 and 2003, many Chinese banks implemented reforms that delegated authority to individual loan officers. The change followed China's entrance into the WTO and offers a plausibly exogenous shock to loan officer incentives to produce information. We find that the bank's internal risk rating becomes a stronger predictor of loan interest rates and ex post outcomes after reform. When the loan officer and the branch president who approves the loan work together longer, the rating also becomes more strongly related to loan prices and outcomes. Our results highlight how incentives and communication costs affect information production and use.