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International Lending: The Role of Lender's Home Country

Author

Listed:
  • Mehdi Beyhaghi
  • Rui Dai
  • Anthony Saunders
  • John Wald

Abstract

The multinational syndicated loan market has crossed the $7 trillion threshold. Prior literature argues that weak borrower country's creditor rights is the main limiting factor to cross‐border lending. We find that lender country's creditor rights can partly substitute for weak borrower creditor rights if a lender is from a better creditor rights country. Our results are robust to controlling for a borrower's country laws, its foreign assets, the loan guarantees provided by its foreign parent, and its choice set of lenders.

Suggested Citation

  • Mehdi Beyhaghi & Rui Dai & Anthony Saunders & John Wald, 2021. "International Lending: The Role of Lender's Home Country," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 53(6), pages 1373-1416, September.
    • Handle: RePEc:wly:jmoncb:v:53:y:2021:i:6:p:1373-1416
    DOI: 10.1111/jmcb.12850
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    References listed on IDEAS

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    Cited by:

    1. Álvarez-Botas, Celia & González, Víctor M., 2024. "How does credit information sharing shape bank loans?," The Quarterly Review of Economics and Finance, Elsevier, vol. 95(C), pages 18-32.

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