IDEAS home Printed from https://ideas.repec.org/a/eee/riibaf/v86y2026ics0275531926000887.html

When banks borrow: Stock market reactions to loan announcements by financial vs. non-financial firms

Author

Listed:
  • Devillard, Yohan
  • Weill, Laurent

Abstract

We examine whether the stock market reacts differently to syndicated loan announcements when the borrower is a financial firm as opposed to a non-financial firm. We apply an event study methodology on a large cross-country dataset of nearly 30,000 loan announcements, including over 2600 from financial companies. We find no evidence of systematic difference in market reactions between financial and non-financial companies under normal conditions, suggesting that the informational value of loans does not depend on the type of borrowing firm. However, during the COVID pandemic, reactions diverged sharply: loan announcements were associated with greater abnormal returns for non-financial firms, interpreted as survival signals, but lower abnormal returns for financial firms, reflecting investor concerns about risk and liquidity. These results emphasize that the interpretation of loan announcements can be context-dependent.

Suggested Citation

  • Devillard, Yohan & Weill, Laurent, 2026. "When banks borrow: Stock market reactions to loan announcements by financial vs. non-financial firms," Research in International Business and Finance, Elsevier, vol. 86(C).
    • Handle: RePEc:eee:riibaf:v:86:y:2026:i:c:s0275531926000887
    DOI: 10.1016/j.ribaf.2026.103361
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0275531926000887
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ribaf.2026.103361?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:riibaf:v:86:y:2026:i:c:s0275531926000887. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ribaf .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.