Too Sunny to Borrow: Sunshine and Borrower Discouragement

Jérémie Bertrand and Laurent Weill
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Jérémie Bertrand: IESEG School of Management

Working Papers of LaRGE Research Center from Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg

Abstract: We test the hypothesis that sunshine affects the discouragement of borrowing firms. Using a sample of about 45,000 firms from 124 countries, for the period 2010-2020, we find that higher sunshine is associated with a greater probability to be discouraged for the borrowing firm. We further 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 the fact that greater 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: 2022
New Economics Papers: this item is included in nep-ban and nep-fdg
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http://ifs.u-strasbg.fr/large/publications/2022/2022-05.pdf (application/pdf)

Related works:
Journal Article: Too sunny to borrow: Sunshine and borrower discouragement (2023)
Working Paper: Too sunny to borrow: Sunshine and borrower discouragement (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:lar:wpaper:2022-05

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