SPEAKER：Dr.Feng Tian (Hong Kong Polytechnic University)

TIME/DATE：2024年7月2日 10:00-11:30am

CLASSROOM：同济大厦A楼308教室

ABSTRACT:
We examine the effects of borrower-lender financial management system (FMS) similarity on bank lending costs. Using a unique dataset of FMS deployment within organizations, we find that banks charge lower loan spreads to borrowers with similar FMS to their own. This effect is stronger for borrowers with poorer information environment and for lenders with less lending experience and higher risk exposure. We use propensity score matching, entropy balancing, instrumental variable estimation, and exploit the Oracle-PeopleSoft merger in 2005 as a source of quasi-exogenous variation in the borrower-lender FMS similarity to alleviate endogeneity concerns. Further analysis reveals that lenders impose more financial covenants on borrowers with greater FMS similarity, but the impact of FMS similarity on loan spread reduction is not affected by the price-covenant trade-off. Our findings shed light on the financial consequences of borrower-lender information technology alignment and speak to the growing industry trend toward corporate-to-bank (C2B) connectivity.

GUEST BIO:

Dr. Feng TIAN (田丰) is an Associate Professor at School of Accounting and Finance at Hong Kong Polytechnic University. His research covers the business value of information technology, IT governance, credit markets, auditing, earnings management and innovation. He has published articles in the top-tier accounting and information systems journals, including Management Science, MIS Quarterly, Information Systems Research, The Accounting Review, and Contemporary Accounting Research, among others.