Do Capital Asset and Labor Conditions Matter in Loan Pricing? Evidence From Capital and Labor Redeployability

Yangyang Chen, Jeffrey Ng, Chong Wang
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Abstract

This article offers the novel insight that loan pricing is affected by the redeployability of borrowers’ capital assets and labor. We find that both capital and labor redeployability are negatively related to loan spread, suggesting that borrowers with higher redeployability enjoy more favorable loan pricing. This finding is consistent with redeployability promoting reduced cost stickiness and enhanced liquidity, which in turn reduces borrowers’ probability of default and lenders’ loan losses given default. Our cross-sectional test results reveal that the relation between redeployability and loan pricing is stronger for firms with more growth opportunities, which is consistent with lenders viewing redeployability as an important way to minimize potential loan losses from risky investments. Also, the relation between redeployability and loan pricing is weaker for loans with more stringent nonpricing terms, suggesting that strict terms may protect lenders and make redeployability less important in loan pricing.JEL Classification: D22, G21, G32, J62.
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资本资产和劳动力条件在贷款定价中重要吗?来自资本和劳动力可调配性的证据
本文提出了一个新见解,即贷款定价受借款人资本资产和劳动力的可重新部署性影响。我们发现,资本和劳动力的可调配性与贷款利差呈负相关,这表明可调配性越高的借款人享有越有利的贷款定价。这一发现与可调配性促进成本粘性降低和流动性增强,进而降低借款人的违约概率和贷款人的违约贷款损失是一致的。我们的横截面检验结果表明,可调配性与贷款定价之间的关系对于具有更多增长机会的企业来说更为紧密,这与贷款人将可调配性视为最大限度地减少风险投资带来的潜在贷款损失的重要途径是一致的。此外,对于非定价条款更严格的贷款,可调配性与贷款定价之间的关系较弱,这表明严格的条款可能会保护贷款人,使可调配性在贷款定价中的重要性降低:D22、G21、G32、J62。
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