بدهی، سررسید بدهی و سرمایه اجتماعی
Abstract
1- Introduction
2- Data and research design
3- Main analyses
4- Extensions and robustness checks
5- Conclusion
References
Abstract
We find that both firm leverage and short-term debt ratios are negatively associated with social capital (i.e., the altruistic tendency and mutual trust among people within a community). This relation is more pronounced in cases where information asymmetry problems are more severe and is robust to using alternative measures of key variables, addressing endogeneity issues, employing alternative model specifications, and simultaneously estimating leverage and short-term debt. An analysis on debt structure (bank loans vs. public debt) shows consistent results. Our findings are in line with the idea that social capital lowers the need for corporate borrowing mechanisms as a means to alleviate agency problems for firms.
Introduction
The capital and debt structures of a firm can affect its value in many ways. One particular channel is through how they alter managerial incentives and impact investment decisions (Jensen and Meckling, 1976). In this regard, finding the optimal levels of leverage and debt maturity involves trading off the benefits and costs associated with them. For instance, using more leverage and shortening debt maturity can both alleviate problems that arise from management entrenchment (Harris and Raviv, 1990; Jensen, 1986), but at the same time introduce shareholder-creditor conflicts and liquidity risk, respectively, in addition to financial distress (e.g., Johnson, 2003; Myers, 1977). 1 Thus, an economic variable that bears the function of substituting the benefits of leverage and short-term debt, thereby lowering the associated potential costs and allowing the reallocation of resources, can be valuable to the firm. In this paper, we hypothesize that social capital fits such a role. Following Guiso et al. (2004), we define social capital as the degree of altruistic tendency and the level of mutual trust among people within a community. Plainly speaking, high social capital regions comprise of individuals that are more trustworthy, more cooperative, and less self-centered (see, for instance, Hasan et al., 2017b; Jha and Chen, 2015; Jha and Cox, 2015). We propose that managers in these areas are less likely to misbehave or take actions that may harm investors. This can be due to their society reflecting who they are, shaping who they become, or forcing them to be more concerned about reputation losses before taking value-destroying actions (Mead, 1934, p. 178). Through each of these channels, the managers are more likely to be perceived by investors as trustworthy.