Description:
This paper studies the effect of top management team (TMT) network centrality on bank loan contracts. We show that firms with high TMT network centrality obtain bank loans with lower loan spreads, larger loan size, longer maturity, and fewer collateral requirements. From the mediating effect analysis, we find that TMT interlocking networks affect loan pricing by reducing agency costs, improving the quality of accounting information, expanding resource channels, and enhancing the credibility of companies. In addition to easing financial constraints, TMT network centrality is also beneficial to investment efficiency and innovation output of corporates, but it will decrease firm performance