Elections hinder firms' access to credit

Florian Leon and Laurent Weill

No 3/2022, BOFIT Discussion Papers from Bank of Finland Institute for Emerging Economies (BOFIT)

Abstract: To analyze whether the occurrence of elections affects access to credit for firms, we perform an investigation using firm-level data covering 44 developed and developing countries. The results show that elections impair access to credit. Specifically, firms are more credit-constrained in election years and pre-election years as elections exacerbate political uncertainty. While lower credit demand is a tangible negative effect of elections, their occurrece per se does not seem to affect credit supply. We further establish that the design of political and financial systems affects how elections influence access to credit.

Keywords: elections; access to credit; credit constraints (search for similar items in EconPapers)
JEL-codes: D72 G21 O16 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-pol
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https://www.econstor.eu/bitstream/10419/249607/1/dp2203.pdf (application/pdf)

Related works:
Journal Article: Elections hinder firms' access to credit (2024)
Working Paper: Elections hinder firms' access to credit (2023)
Working Paper: Elections Hinder Firms' Access to Credit (2021)
Working Paper: Elections Hinder Firms’ Access to Credit (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bofitp:bdp2022_003

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