We investigate how borrowers' corporate governance influences bank loan contracting terms in emerging markets and how this relation varies across countries with different country-level governance. We find that borrowers with stronger corporate governance obtain favorable contracting terms with...

In this study, we examine the effect of worldwide board reforms on the cost of debt financing. We find an overall increase in loan spreads in countries that initiate board reforms versus those without the reforms, which suggests that board reforms strengthen the power of shareholders at the cost...

This article investigates the influence of firm-level corporate governance on the cost of equity capital to firms in Bangladesh. Agency theory suggests that better corporate governance reduces agency costs and improves investors' confidence, which in turn reduces the rate of return on stock...

Exploiting the staggered adoption of universal demand (UD) laws as exogenous shocks to filing derivative lawsuits, we find that weakened shareholder litigation rights cause a significant increase in the cost of debt. Deteriorated corporate governance, increased information asymmetry, and...

This study shows that firms with good corporate governance are consistently associated with both lower cost of equity and cost of debt capital in an international setting. The association between corporate governance and the cost of equity is more pronounced in countries with strong legal...

Do shareholder protection laws affect the corporate cost of capital? To identify the causal impact of shareholder protection laws on firms’ implied cost of capital, we exploit the staggered adoption across 23 U.S. states of universal demand (UD) laws, which place significant obstacles to...

We explore whether government ownership affects the cost of debt using a sample of fully and partially privatized companies. On average across firms, a one-percentage-point decrease in government ownership is associated with an increase in the credit spread, used as a proxy for the cost of debt,...

This paper analyzes the theoretical link between governance (defined loosely as the degree of protection offered to outside shareholders), and the cost of borrowing. We find, consistent with empirical evidence, that improvements in governance reduce the likelihood of default. Also, we find that...