EconPapers    
Economics at your fingertips  
 

Borrowing beyond borders: Foreign assets, lender choice, and loan pricing in the syndicated bank loan market

Joel F. Houston, Jennifer Itzkowitz and Andy Naranjo

Journal of Corporate Finance, 2017, vol. 42, issue C, 315-334

Abstract: This paper examines the ability of firms to overcome cross-country barriers to borrowing through foreign asset connections. We find that firm-level foreign assets are an important mechanism in reducing the boundary between borrowers and lenders and thereby enhancing capital access in the syndicated loan market. Our results suggest that firms with foreign assets are more likely to select a foreign lead lender and that the corresponding loans have better pricing terms. And, more specifically, we find that the location of the foreign assets strongly predicts the foreign lender's location. These results support the hypothesis that foreign presence helps reduce information barriers that arise across borders.

Keywords: Syndicated loans; Multinational firms; Loan pricing; Foreign assets; Integration; International banking (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0929119916303480
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:42:y:2017:i:c:p:315-334

Access Statistics for this article

Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter

More articles in Journal of Corporate Finance from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2018-11-10
Handle: RePEc:eee:corfin:v:42:y:2017:i:c:p:315-334