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Title: The effects of reporting standards and information sharing on loan contracting: cross-country evidence
Authors: Gopalakrishnan, Balagopal
Keywords: Syndicated loans;Reporting standards;Information sharing;Economic policy uncertainty
Issue Date: 2020
Publisher: Cogent Economics & Finance
Citation: Gopalakrishnan, B., & Mohapatra, S. (2020). The effects of reporting standards and information sharing on loan contracting: Cross-country evidence. Cogent Economics and Finance, 8(1), 20. doi:https://www.tandfonline. com/doi/full/10.1080/23322039.2020.1716920
Abstract: Institutional factors that enhance the quality of financial reporting and sharing of credit information can alleviate informational gaps between contracting parties and improve loan contract terms. Using cross-country data on syndicated loans, we find that the cost of debt financing is lower for riskier borrowers in countries with stronger reporting standards and improved credit information sharing. We also find that information quality is more important as compared to information sharing for loan pricing. Both of these effects are larger during periods of higher economic policy uncertainty when information asymmetry is likely to be higher. Our findings suggest that better availability of hard information plays a positive role in reducing borrowing costs of riskier firms.
ISSN: 23322039
Appears in Collections:Journal Articles

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