Investigating the Impact of Institutional Investors' Horizon on Financing through Banking Sources

One of the most important concerns of lenders for granting loans and credits is the borrower's ability to repay the principal and interest of the loan, as well as credits. As such, in order to provide financial resources through debts to banks, according to the capital structure of companies and enterprises, the horizon of institutional investors has been examined. One of the solutions is to review the financial statements in order to check the company's ability to repay the facility. But the inappropriate quality of financial statements can increase the risk of predicting the loss of receivables. To measure the horizon of institutional investors, the turnover rate of buyers and sellers has been used, and to measure bank debts, the ratio of bank debt to total debt has been used. By selecting a sample of 135 companies admitted to the Tehran Stock Exchange, during the period from 2012 to 2018 and using the regression model, the research results indicated that there is a negative relationship between the horizon of long-term institutional investors and financing through banking sources. With the presence of institutional shareholders with long-term horizons, the amount of financing through bank debt decreases. Also, there is a positive relationship between the horizon of short-term institutional investors and bank debt financing. In other words, with the presence of institutional shareholders with a short-term horizon, the amount of financing through bank debt increases.