• DOI:10.1093/RFS/16.1.0237
Corpus ID: 44966390

Managerial Compensation and the Market Reaction to Bank Loans

@article{Almazn2000ManagerialCA,
  title={Managerial Compensation and the Market Reaction to Bank Loans},
  author={A. Almaz{\'a}n and J. Su{\'a}rez},
  journal={CEPR Discussion Paper Series},
  year={2000}
}

A. Almazán, J. Suárez

Published 2000

Business

CEPR Discussion Paper Series

This Paper considers why a manager would choose to submit himself to the discipline of bank monitoring. This issue is analysed within the context of a model where the manager enjoys private benefits, which can be restricted by the monitor, and is optimally compensated by shareholders. Within this setting, we find that managers will submit to monitoring when they receive favourable private information. This result is consistent with event study evidence that suggests that the market has a… CONTINUE READING

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