In order to enhance the scientific research atmosphere, Shenzhen University Institute of FinTech continues to hold the serial academic lectures. On the afternoon of November 8, 2023, the institute invited Professor Walid Saffar from The Hong Kong Polytechnic University to give an academic lecture. The lecture was hosted by Associate Professor Karen Lai from Shenzhen University Institute of FinTech.

          

In this report, Professor Walid Saffar introduced his recent research achievements: This study examines the role of private firm disclosure transparency in loan contracting of public firms. Using loan data from 48 countries between 2000 and 2020, we find that private firm transparency significantly lowers public firms' loan spreads. This finding is consistent with the positive information externalities view in that private firm disclosure transparency helps banks to ex-ante evaluate public borrowers' credit risk within the industry context and reduce information asymmetry between banks and borrowers. We also find that the impact of private firm transparency is greater for public firms with higher information opacity or lower bank monitoring intensity. Furthermore, as private firm disclosures become more transparent, non-price terms such as maturity, collateral use, covenants, and financial covenants become less stringent. Overall, our findings identify positive externalities of private firm transparency in the public firm loan market, namely, reducing information frictions and improving contracting efficiency.

After the lecture, Professor Walid Saffar also had a thorough communication with the faculty members and students of the institute. The academic atmosphere on site was enthusiastic.



Introduction of the lecturer:

                           

Prof. Walid Saffar is currently a Professor of the School of Accounting and Finance at The Hong Kong Polytechnic University. His main research interests include corporate finance, corporate governance, and international accounting and finance. His research papers have been published in leading journals such as Journal of Accounting Economics, Journal of Accounting Research, Journal of Financial Economics, Strategic Management Journal, Journal of International Business Studies, Journal of Financial and Quantitative Analysis, Contemporary Accounting Research, and Review of Accounting Studies.