Does financial statement information affect cross-border lending by foreign banks in the syndicated loan market? Evidence from a natural experiment

Chan, Ann Ling‐Ching; Hsieh, Yi‐Ting; Lee, Edward; Yueh, Meng-Lan

doi:10.1016/j.jaccpubpol.2015.05.005

Cited by 11 publications

(13 citation statements)

References 45 publications

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“…We measure syndicated loan price by fees, overlibor and spread. Fees (commitment fee and annual fee) are used to price options 6 , overliborrate over the London Interbank Offered Rate (LIBOR) -is to measure syndicated loan rate and spread (all-in-drawn spread) is the total of the annual fee and overlibor (Chan et al 2015). To examine the effects of banking market concentration on syndicated loan prices, we follow (Lim et al 2014) and control for loan facility characteristics, such as loan size, maturity, number of lenders, term loan, having covenants and performance price features.…”

Section: Syndicated Loan Price and Facility Characteristicsmentioning

confidence: 99%

Banking market concentration and syndicated loan prices

Han

2018

Rev Quant Finan Acc

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This paper investigates the 'price-concentration' relationship in pricing syndicated loans. By measuring bank concentration at a state level in U.S, we show supporting evidence to market power hypothesis that syndicated loan prices are positively associated with the concentration of both borrower's and lead arranger's markets but not the concentration of participant lenders' markets. We also show that loan prices are more sensitively to lead arranger's market concentration than to borrower's and a borrower could reduce loan costs by borrowing from a less concentrated bank market. In sharp contrast, loan prices are negatively associated with bank concentration if a loan syndication is led by an investment bank or non-bank financial institution. Our findings are robust to a variety of bank concentration measures and model specification.

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Section: Syndicated Loan Price and Facility Characteristicsmentioning

confidence: 99%

Banking market concentration and syndicated loan prices

Han

2018

Rev Quant Finan Acc

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“…Last, this study complements the syndicated loan literature on cross‐border syndicated lending pricing and nonpricing terms (Chan et al, 2015; Gonas et al, 2004; Haselmann & Wachtel, 2011). Specifically, our work relates to the discussion on how state ownership and government support affect the policy banks' cross‐border syndicated lending (Gadanecz et al, 2008; Wang et al, 2017).…”

Section: Introductionmentioning

confidence: 62%

Does Chinese policy banks' overseas lending favor Belt Road Initiative countries?

Chen¹,

Fang²,

Yun

et al. 2022

International Studies of Economics

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This paper examines how Chinese policy banks responded to China's Belt Road Initiative (BRI) using transactionlevel international syndicated loan data. Employing a difference-in-differences (DID) estimation, we show that Chinese policy banks increased aggregate lending (number of loans and loan amounts) to firms from the BRI countries compared to those from the non-BRI countries after the initiative. This increase was more pronounced among firms along the continental route and in the infrastructure sectors. We also find that Chinese policy banks' loans to the BRI borrowers were associated with reduced spread, lowered collateral requirement, and extended maturity. Moreover, our results suggest that Chinese policy banks gave more support to firms from the BRI countries with weaker economic performance, more fragile institutional quality, and closer political interests. Overall, our study highlights the supportive role played by Chinese policy banks in implementing a national globalization strategy.

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“…Transparency-thus the information available to investors-is low in countries with low stock market liquidity and thus high LAMBDA. The second measure is IFRS, an indicator variable that equals 1 if the country adopted IFRS and 0 otherwise (Beuselinck, Joos, Khurana, and Meulen 2017;Chan, Hsieh, Lee, and Yueh 2015;Cheng, Huang, and Li 2020;Daske, Hail, Leuz, and Verdi 2008;Gunn, Kawada, and Michas 2019). We set TRANS to 1 (0 otherwise) for firms with LAMBDA below the sample median when LAMBDA is used and TRANS to IFRS when IFRS is used.…”

Section: Transparencymentioning

confidence: 99%

Overreaction or Underreaction to Intra-Industry Earnings Information Transfer: A Cross-Country Analysis

Cheng

Fang

Huang

et al. 2021

Journal of International Accounting Research

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We apply the moderated confidence hypothesis (MCH) to investigate overreaction and underreaction in intra-industry earnings information transfers in an international setting. MCH predicts that late announcing firms’ investors overreact (underreact) to early announcing industry peers’ earnings news when early announcing peers’ earnings news is imprecise (precise) signals of late announcing firms’ earnings. Consistent with early announcing peers’ earnings news being imprecise signals of late announcing firms’ earnings in an international setting, we find that late announcing firms’ investors overreact to early announcing peers’ earnings news. The country-level information environment and culture shape the precision of peers’ earnings as signals of each other’s earnings and investor behaviors. Consistent with MCH, we find that late announcing firms’ investors are more likely to underreact in countries with a richer information environment, are more likely to overreact in countries with higher individualism and are less likely to overreact in countries with higher uncertainty avoidance.

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Does financial statement information affect cross-border lending by foreign banks in the syndicated loan market? Evidence from a natural experiment

Cited by 11 publications

References 45 publications

Banking market concentration and syndicated loan prices

Banking market concentration and syndicated loan prices

Does Chinese policy banks' overseas lending favor Belt Road Initiative countries?

Overreaction or Underreaction to Intra-Industry Earnings Information Transfer: A Cross-Country Analysis

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