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Do the types of financial system, corporate governance system and legal system of the borrower’s country influence the interest rate spread of syndicated loans?

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dc.contributor.authorMoutinho, Nuno
dc.contributor.authorAlves, Carlos Francisco
dc.contributor.authorMartins, Francisco Vitorino
dc.date.accessioned2020-09-22T08:43:54Z
dc.date.available2020-09-22T08:43:54Z
dc.date.issued2017
dc.description.abstractThe institutional environment of the company’s country is reflected in its choices between different sources of financing. Given the fact that different countries have diverse specific characteristics, this work proposes to investigate how the financial, governance and legal systems of the borrower’s country of origin influence the costs of financing. Using a sample of syndicated loans with 85,220 tranches, corresponding to 50,658 loans by 25,511 non-financial borrowers from 122 countries, over the period between 2000 and 2012, we find evidence that borrowers pay lower spreads when they come from countries with a bank-based financial system, a continental governance system and when the legal system is common law. By splitting the sample according to the level of risk, we show that for borrowers with an investment grade rating, the type of legal system is irrelevant, whereas for those borrowers with junk ratings no type of system is relevant in determining spreads. When borrowers are junk or unrated, the lenders tend to perform a careful analysis of the company’s financial situation and award higher spreads in countries where the legal system is civil or socialist law. Our results suggest that the borrower country’s financial, governance and legal systems are relevant in determining syndicated loan spreads.pt_PT
dc.description.versioninfo:eu-repo/semantics/publishedVersionpt_PT
dc.identifier.citationDo the types of financial system, corporate governance system and legal system of the borrower’s country influence the interest rate spread of syndicated loans?. In 11th Annual Meeting of the Portuguese Economic Journal. Vila Realpt_PT
dc.identifier.isbn978-989-704-242-3
dc.identifier.urihttp://hdl.handle.net/10198/22725
dc.language.isoengpt_PT
dc.peerreviewedyespt_PT
dc.rights.urihttp://creativecommons.org/licenses/by/4.0/pt_PT
dc.subjectBank loanspt_PT
dc.subjectCost of debtpt_PT
dc.subjectFinancial systempt_PT
dc.subjectGovernance systempt_PT
dc.subjectLegal systempt_PT
dc.titleDo the types of financial system, corporate governance system and legal system of the borrower’s country influence the interest rate spread of syndicated loans?pt_PT
dc.typeconference object
dspace.entity.typePublication
oaire.citation.conferencePlaceVila Realpt_PT
oaire.citation.title11TH ANNUAL MEETING OF THE PORTUGUESE ECONOMIC JOURNALpt_PT
person.familyNameMoutinho
person.givenNameNuno
person.identifier.ciencia-idCA1B-4924-2BBA
person.identifier.orcid0000-0002-9242-8324
person.identifier.scopus-author-id57742333300
rcaap.rightsopenAccesspt_PT
rcaap.typeconferenceObjectpt_PT
relation.isAuthorOfPublication66a63650-20a8-4110-a9f7-7f45fa84c14b
relation.isAuthorOfPublication.latestForDiscovery66a63650-20a8-4110-a9f7-7f45fa84c14b

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