Volume 21, Issue 2 (6-2026)                   J. Mon. Ec. 2026, 21(2): 185-201 | Back to browse issues page

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rashidi M. Examining the limitations of debt contracts based on the management ability of borrower companies. J. Mon. Ec. 2026; 21 (2) :185-201
URL: http://jme.mbri.ac.ir/article-1-760-en.html
Examining the limitations of debt contracts based on the management ability of borrower companies
Mohsen Rashidi *
Abstract:   (9 Views)
Management ability can be considered a factor in creating a balance between the information dimension of credit contracts between the company and financial resources providers. The purpose of this paper is to examine the limitations of debt contracts based on management ability. In this study, information related to 120 listed companies was collected during the period 2016 to 2023 and the research hypotheses were tested using a mixed regression approach. The findings of the study show that manager ability has a significant effect on the dispersion of interest rates on facilities received. Also, the results indicate that manager ability leads to a reduction in contractual limitations. Finally, the results show that management ability leads to the use of a short-term financing approach. Higher management ability can lead to more favorable loan terms by signaling favorable future performance of the company and increasing information transparency. In other words, capable managers are more efficient in converting company resources into income, and as a result, they improve the company's future performance and cash flows and reduce expected risk.
Keywords: Management ability, financing rate dispersion, debt conditions, short-term financing
     
Type of Study: Original Research - Empirical | Subject: Monetary Economics
Received: 1 Feb 2026 | Accepted: 25 May 2026 | Published: 6 Jun 2026
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