Too sunny to borrow: Sunshine and borrower discouragement

Jérémie Bertrand and Laurent Weill

Research in International Business and Finance, 2023, vol. 65, issue C

Abstract: We test the hypothesis that sunshine affects the discouragement of borrowing firms. Using a sample of approximately 45,000 firms from 124 countries for the period 2010–2020, we find that higher sunshine is associated with a greater probability of being discouraged for the borrowing firm. Furthermore, we establish that the discouraging impact of sunshine on the decision to apply for a loan is only observed in low latitude zones. We explain these findings by arguing that more sunshine creates a negative mood in hot regions. Additional results suggest that managerial features affect the discouraging impact of sunshine.

Keywords: Access to credit; Borrower discouragement; Sunshine; Developing countries (search for similar items in EconPapers)
JEL-codes: G21 G41 (search for similar items in EconPapers)
Date: 2023
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Related works:
Working Paper: Too sunny to borrow: Sunshine and borrower discouragement (2023)
Working Paper: Too Sunny to Borrow: Sunshine and Borrower Discouragement (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:65:y:2023:i:c:s0275531923001149

DOI: 10.1016/j.ribaf.2023.101988

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