THESIS
2021
1 online resource (x, 59 pages) : illustrations (some color), color maps
Abstract
Essay I
Spillover Effects of CSR Disclosure Regulations across Lending Relationships
This paper examines whether and how CSR disclosure regulations imposed on banks
generate spillover effects along the lending channel. I use a setting of U.S. firms borrowing
from non-U.S. banks and exploit the staggered adoption of CSR disclosure regulations
in banks’ home countries. I find that exposed borrowers that depend on affected banks
improve their CSR performance following the disclosure mandate. The effects are stronger
when a disclosure regulation induces a greater increase in the amount of new and hard
information provided by banks, and when the lending relationship is more important for
a borrowing firm. Furthermore, exposed borrowers with better CSR performance obtain
more favorable loan t...[
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Essay I
Spillover Effects of CSR Disclosure Regulations across Lending Relationships
This paper examines whether and how CSR disclosure regulations imposed on banks
generate spillover effects along the lending channel. I use a setting of U.S. firms borrowing
from non-U.S. banks and exploit the staggered adoption of CSR disclosure regulations
in banks’ home countries. I find that exposed borrowers that depend on affected banks
improve their CSR performance following the disclosure mandate. The effects are stronger
when a disclosure regulation induces a greater increase in the amount of new and hard
information provided by banks, and when the lending relationship is more important for
a borrowing firm. Furthermore, exposed borrowers with better CSR performance obtain
more favorable loan terms and are more likely to maintain their relationship with the
affected banks. Collectively, this study documents the role of lending relationships in
transmitting the effect of CSR disclosure regulations from banks to borrowing firms.
Essay II
Learning from Peers: Evidence from Disclosure of Consumer Complaints
The Consumer Financial Protection Bureau (CFPB) released a database of consumer
complaints against banks under its supervision in 2013. This paper examines how rival
banks that are not supervised by the CFPB react to this disclosure. We find that after the
disclosure, rival banks exhibit a greater increase in mortgage approval rates in markets
with more intensive complaints regarding the mortgages of CFPB-supervised banks. The
effect is stronger when there is less information on CFPB-supervised banks’ local operations,
when the complaints are more informative, and when the rival banks are better able
to process the disclosures. The findings suggest that rival banks learn from the disclosures
about peers’ operational deficiencies in local markets and thereby make aggressive
lending decisions. This evidence supports the learning-from-peers channel, through which
the disclosure regulation imposes real effects.
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