Cross Ownership, Loan Commitment, Managerial Delegation and the “Prisoner’s Dilemma”

Haitao Qu, Leonard F.S. Wang, Di Wu, Can Yang and Ji Sun

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates the relationship between cross ownership, sales delegation and loan commitment. We find that under sales delegation, a higher degree of cross ownership decreases the optimal bank loan interest rate, which is beneficial to the firm profits. However, cross ownership reduces the firm output, leading a lower consumer surplus and social welfare. The policy implication is that antitrust authority and banking regulatory bureau should “coordinate” policies to mitigate the concerned stakeholders’ conflicts.

Keywords: Cross ownership; Sales delegation; Loan commitment (search for similar items in EconPapers)
JEL-codes: G32 G34 J53 L21 (search for similar items in EconPapers)
Date: 2022-07-25, Revised 2022-11-02
References: Add references at CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/129075/1/MPRA_paper_129075.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:129075

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().