How Has the Global Financial Crisis Affected Syndicated Loan Terms in Emerging Markets? Evidence from China

Guglielmo Maria Caporale, Suman Lodh () and Monomita Nandy

No 1481, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: This paper examines the impact of the recent global financial crisis on the cost of debt capital (syndicated loans) in a leading emerging market, namely China, using difference-in-differences and GARCH approaches. Before the crisis China adopted banking reforms allowing entry of foreign banks and more domestic participation in the syndicated loan market. As a result, during the crisis the volume of syndicated loans grew steadily, in contrast to other countries. In addition, the amount of foreign syndicated loans decreased and average maturity increased compared to the precrisis period. Our findings provide useful information to policy makers to devise effective responses to financial crises.

Keywords: Loan Spread; Loan Amount; Loan Maturity; China; Financial Crisis (search for similar items in EconPapers)
JEL-codes: G21 G32 P34 (search for similar items in EconPapers)
Pages: 39 p.
Date: 2015
New Economics Papers: this item is included in nep-ban, nep-cna, nep-ifn and nep-tra
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https://www.diw.de/documents/publikationen/73/diw_01.c.504329.de/dp1481.pdf (application/pdf)

Related works:
Journal Article: How has the global financial crisis affected syndicated loan terms in emerging markets? Evidence from China (2018)
Working Paper: How Has the Global Financial Crisis Affected Syndicated Loan Terms in Emerging Markets? Evidence from China (2015)
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