Purpose

The purpose of this paper is to empirically examine the impact of the bank-appointed directors on the agency costs of debt by using the idiosyncratic risk of stock returns as a measure of agency costs of debt.

Design/methodology/approach

We use multivariate panel regression, event study and finally, propensity score matching approaches to test our hypothesis. The robustness of the results is tested for possible endogeneity issues by employing instrumental variable two-stage least square (IV-2SLS) technique.

Findings

Consistent with the efficient monitoring hypothesis, we find a negative relationship between the presence of the bank-appointed director and the idiosyncratic volatility of stock returns among Indian firms. This implies that such firms take up less risky investment projects.

Originality/value

We contribute to the literature from two aspects. First, to the best of our knowledge, this is the first study that examines the monitoring efficiency of creditors' governance. Hitherto, such examinations are done from the shareholders' perspective. Second, we examine the role of the bank-appointed directors on the board of non-financial firms in an emerging world context and find, contrary to the existing evidence in the US context, active monitoring role played by such directors.

中文翻译：

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银行任命的董事和特殊的波动性：来自印度的证据

目的

本文的目的是通过使用股票收益的异质风险作为债务代理成本的衡量标准，实证检验银行任命的董事对债务代理成本的影响。

设计/方法/方法

我们使用多元面板回归、事件研究，最后使用倾向得分匹配方法来检验我们的假设。通过采用工具变量两阶段最小二乘 (IV-2SLS) 技术测试结果的稳健性，以解决可能的内生性问题。

发现

与有效监控假设一致，我们发现银行任命董事的存在与印度公司股票回报的特殊波动之间存在负相关关系。这意味着此类公司承担风险较小的投资项目。

原创性/价值

我们从两个方面对文献做出贡献。首先，据我们所知，这是第一项检验债权人治理监督效率的研究。迄今为止，此类审查都是从股东的角度进行的。其次，我们研究了银行任命的董事在新兴世界背景下在非金融公司董事会中的作用，并发现与美国背景下的现有证据相反，这些董事发挥了积极的监督作用。