Executives former banking experience, entertainment exp....pptVIP

Change regression * Endogeneity issue We also apply the propensity-matching method to address the endogeneity issue. * Further tests Whether the effect of social network can be more pronounced if bank connected executives come from the lending banks Redefining Network variable as equal to 2 for Lender_network, 1 for Nonlender_network, and 0 for no network. The results are broadly similar. We divide top management into executives and independent directors social networks The coefficients on independent social network is smaller, indicating incremental contribution. * Further tests (Cont) We consider the number of bank connected members We create one variable, Strength, equal to the number of executives and directors who have the connections with banks. We repeat our analysis using political connection Results show the effect of political connection is less significant than bank connection We also repeat our regression by dividing total sample into small firms and large firms * Findings Social network with banks can: lead to better access to bank loans; Reduce collateral requirement; Enhance bank lending efficiency. Entertainment spending help to maintain social network and further strengthen social network’s effect The above results are more pronounced after the economic stimulus package and in the regions with severe government intervetioin. * Findings Social network and entertainment spending help to explain the coexistence between a weak institutional framework and vibrant private sector growth in China. Overall, social network with banks can be a substitute for legal protection and help reduce information asymmetry and creditor concerns and monitoring costs, at least in the context of China. * Thank you and your comments and suggestions are welcome. * * Executive’s former banking experience, entertainment expenditures and bank lending decisions: Evidence from China’s non-SOE firms Gary Tian Chinese Commerce Research Centre School of Accounting and Finance Univer