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How has the global financial crisis affected syndicated loan terms in emerging markets? Evidence from China

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  • Guglielmo Maria Caporale
  • Suman Lodh
  • Monomita Nandy

Abstract

This paper examines the impact of the recent global financial crisis on the cost of debt capital (syndicated loans) in a leading emerging market, namely China, using the difference‐in‐differences approach. Before the crisis, China adopted banking reforms allowing the entry of foreign banks and more domestic participation in the syndicated loan market. As a result, during the crisis, the volume of syndicated loans grew steadily, in contrast to other countries. In addition, the amount of foreign syndicated loans decreased and average maturity increased compared with the pre‐crisis period. Our findings provide useful information to policy makers for devising effective responses to financial crises.

Suggested Citation

  • Guglielmo Maria Caporale & Suman Lodh & Monomita Nandy, 2018. "How has the global financial crisis affected syndicated loan terms in emerging markets? Evidence from China," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 23(4), pages 478-491, October.
    • Handle: RePEc:wly:ijfiec:v:23:y:2018:i:4:p:478-491
    DOI: 10.1002/ijfe.1633
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    Cited by:

    1. Fang, Heyang & Zhang, Yifei, 2019. "Political Tensions and Corporate Cross-border Financing: Evidence from the China-U.S. Trade War," MPRA Paper 95494, University Library of Munich, Germany.
    2. Bo Yan & Mengru Liang & Lifeng Liu, 2025. "Optimal decisions of retailer's loans from bank," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 1522-1539, April.
    3. Luqiao Zhang & Biao Mi & Yun Shen & Liang Han, 2023. "When in Rome, do as the Romans do: loan syndication in a state-dominated market," Review of Quantitative Finance and Accounting, Springer, vol. 60(4), pages 1469-1494, May.
    4. Michael Machokoto & Geofry Areneke & Davis Nyangara, 2021. "Financial conservatism, firm value and international business risk: Evidence from emerging economies around the global financial crisis," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 4590-4608, July.

    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • P34 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

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