Stakeholder Orientation and the Tightness of Bank Loan Covenants
利用美国各州分阶段实施利益相关者法规的准自然实验，研究发现该法规显著放松了银行贷款契约的严格程度，且信息不对称程度越高或利益相关者缺乏可观测信号时，放松效果更明显。
Our research explores the impact of stakeholder orientation on the tightness of bank loan covenants. To study this, we leverage a quasi‐experimental scenario arising from the phased implementation of constituency statutes in the United States to conduct our investigation. These statutes offer managers a legal instrument to shield the interests of stakeholders other than shareholders. Employing a difference‐in‐differences approach, our analysis indicates a substantial relaxation in the strictness of loan covenants for companies established in states that have constituency statutes. Furthermore, cross‐sectional tests indicate that covenant strictness decreases more when there is higher information asymmetry or when there is a lack of observable signals for creditors, customers, suppliers, and employees to gauge the firm's future prospects of expropriation. Our findings indicate that the reduction of information asymmetry plays a more dominant role than the mitigation of agency conflicts in explaining the observed changes. Additionally, when we consider the overall terms of loan contracts, the enforcement of these statutes has a greater influence on loan covenants than on loan spread.