FACTORS THAT INFLUENCED SYNDICATED LOANS DECISIONS IN THE ASEAN OVER THE PERIOD 2006-2010

BANDONO, ANTHONY KEVIN and Marciano, Deddy (2013) FACTORS THAT INFLUENCED SYNDICATED LOANS DECISIONS IN THE ASEAN OVER THE PERIOD 2006-2010. In: The 10th International Annual Symposium on Management, 1 Maret 2013, Malang, Jawa Timur.

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Abstract

Syndicated loans are very important tools for financing investments of firms in a country and consequently for the development of the country as a whole. The emerging markets like ASEAN poses significantly high information asymmetry problem compared to Europe and United States, so that research on syndicated loans in this region is very necessary and important. This necessity also arises from the very promising growth and economic potential of the ASEAN region. The research uses Logit regression model to determine whether the loan size, loan maturity, public status of companies, secured loans, and country risks could affect the decision of the lead arranger to syndicate the loan in the ASEAN region over the period 2006-2010. Robustness check that uses the Probit regression model were performed to check the efficiency of the results. It was found that the lead arranger tends to syndicate the loans when the maturity of the loan is shorter, the loan is secured, and the country risk is higher. The size of the loan and the public company status has insignificant effects to the decision of the lead arranger to syndicate the loan. Those findings show that the lead arranger considers to diversify the risk of the loan in the ASEAN market which has high level of risk and information asymmetry issues. This contradicts with the findings in the United States and Europe market as developed countries. Lead arranger in those markets applying a “certification effect” theory that syndicates the low risk loans to maintain their reputation.

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: Syndicated loans, Information asymmetry, Loan size, Loan maturity, Country risk .
Subjects: H Social Sciences > HG Finance
Divisions: Faculty of Business and Economic > Department of Management
Depositing User: Deddy Marciano 3372
Date Deposited: 13 Feb 2018 01:41
Last Modified: 13 Feb 2018 08:54
URI: http://repository.ubaya.ac.id/id/eprint/31666

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