The Impact of Bank Financing on Borrowers’ Voluntary Disclosures and Real Investments

Speaker：LIN Yupeng（Chair Associate Professor, National University of Singapore Business School）

Host：DAI Yun, Associate Professor, Lingnan College

Time and Date：14:30-16:30, Mar. 11, 2022

Venue: Third floor, Lingnan hall

Language: English +Chinese           

Abstract:

This paper examines how an increase in bank lending affects firms’ investment disclosures and policies. Exploiting the unconventional liquidity injections by the European Central Bank in 2011-2012, we find that US borrowers of EU banks issue more management capital expenditure (capex) forecasts following the liquidity injections, relative to other US borrowers. This effect does not extend to management earnings forecasts and is more pronounced for firms that have greater financial constraints, are younger, or have higher growth volatility. Consistent with the notion that increased bank lending motivates managers to issue capex forecasts to elicit market feedback, we find that the association between capex adjustments and stock market reactions to these forecasts increases following the liquidity injections. Overall, we document a new channel through which bank financing affects borrowers’ disclosure choices and real investments

 Profile of the speaker:

Lin Yupeng, graduated from Lingnan College of Sun Yat-Sen University in 2008 with a bachelor's degree in International Economics and Trade, and received a Ph.D. from the National University of Singapore in 2014. He taught at the City University of Hong Kong from 2014 to 2016, and has been working at the National University of Singapore Business School since 2016, where he is currently a chair associate professor. The main research areas are corporate finance, family finance, accounting, etc., published in top academic journals such as Journal of Accounting & Economics, The Accounting Review, Journal of Financial and Quantitative Analysis, Journal of Accounting Research, Journal of Law and Economics, Organization Science, etc. Multiple papers