| Summary: | 碩士 === 國立臺北大學 === 企業管理學系 === 102 === With the liberalization and internationalization of domestic economy, financial products and services are more diversified and various financial services industry spring up. Benefits from this, corporates have a bunch of financing resources. Besides corporates’ own funds, they can obtain funds through borrowing from financial institutions, and issuing bills, stocks and bonds in capital market. Despite of this, borrowing from financial institutions is still a major channel of corporate financing.
In this study, we examine whether the company's historical borrowing costs would affect the current financing costs or not. That is, whether there exists a phenomenon of anchoring when a bank decides a lending rate.
The results showed an existence of anchoring bias when bank conducts a lending activity. The effect is stronger when the historical reference deal is more recent. In other words, anchoring bias has recency effect. We investigate this prediction with four measures of salience: whether the lead bank is the same for both loans, whether the CEO of the borrower is the same for both loans, whether bank lending rate is fixed or floating, and whether the borrower offer collateral. Consistent with Kahneman (1992), we find that anchoring is stronger when the reference point is more salient.
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