International Lending: The Role of Lender's Home Country

Mehdi Beyhaghi, Rui Dai, Anthony Saunders and John Wald

Journal of Money, Credit and Banking, 2021, vol. 53, issue 6, 1373-1416

Abstract: The multinational syndicated loan market has crossed the $7 trillion threshold. Prior literature argues that weak borrower country's creditor rights is the main limiting factor to cross‐border lending. We find that lender country's creditor rights can partly substitute for weak borrower creditor rights if a lender is from a better creditor rights country. Our results are robust to controlling for a borrower's country laws, its foreign assets, the loan guarantees provided by its foreign parent, and its choice set of lenders.

Date: 2021
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https://doi.org/10.1111/jmcb.12850

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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:53:y:2021:i:6:p:1373-1416

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