Abstract
This study examines whether a firm's subsidiary operations in offshore financial centers (OFCs) affect loan syndicate structure. We find that as borrowers engage more aggressively in operations in OFCs, lead lenders of a loan syndicate hold a larger percentage of loans to such firms and the number of lenders participating in a loan syndicate becomes smaller. This finding is robust to various robustness tests including propensity score matching analysis and quasi-natural experiment. Furthermore, we find that lead lender reputation and prior lending relationship with the borrower can attenuate the positive relation between OFC operations and loan syndicate concentration.
| Original language | English |
|---|---|
| Pages (from-to) | 157-180 |
| Journal | Journal of Empirical Finance |
| Volume | 45 |
| Online published | 21 Nov 2017 |
| DOIs | |
| Publication status | Published - Jan 2018 |
| Externally published | Yes |
Research Keywords
- Financial contracting
- Information asymmetry
- Loan syndicate structure
- Multi-national firms
- Offshore financial center
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