Operations in offshore financial centers and loan syndicate structure

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

6 Scopus Citations
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Original languageEnglish
Pages (from-to)157-180
Journal / PublicationJournal of Empirical Finance
Online published21 Nov 2017
Publication statusPublished - Jan 2018
Externally publishedYes


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.

Research Area(s)

  • Financial contracting, Information asymmetry, Loan syndicate structure, Multi-national firms, Offshore financial center