Political Uncertainty and Bank Loan Contracts: Does Government Quality Matter?

被引：0
|
作者：
Yin-Siang Huang
Iftekhar Hasan
Ying-Chen Huang
Chih-Yung Lin
机构：
[1] Fuzhou University of International Studies and Trade,Department of Financial Engineering
[2] Fordham University,Department of Finance
[3] National United University,Department of Information Management and Finance
[4] National Chiao-Tung University,undefined
来源：
Journal of Financial Services Research | 2021年 / 60卷
关键词：
Political uncertainty; Bank loans; Loan spreads; Loan covenants; Opinion poll; Government quality; Elections; G32; G33; G34;
D O I：
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中图分类号：
学科分类号：
摘要：
We investigate the relation between political uncertainty and bank loan spreads using a sample of loan contracts for the G20 firms during the period from 1982 to 2015. We find that banks charge firms higher loan spreads and require more covenants during election years when domestic political risks are elevated. Greater differences in the support ratios of opinion polls on candidates lead to the lower cost of bank loans. This political effect also lessens when the government quality of the borrower’s country is better than that of the lender’s country. Better quality government can lower the political risk component of bank loan spreads.
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页码：157 / 185
页数：28
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