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Determinants of global loan pricing: Creditor rights or country size?

Author

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  • Manthos Delis

    (Audencia Business School)

  • Maria Iosifidi

    (Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School)

Abstract

Using global data on syndicated loans, we show that any negative effect of stronger creditor rights on loan spreads, as identified in the prior literature (Qian and Strahan, 2007; Bae and Goyal, 2009), disappears once we include a single country characteristic: country size. This finding is robust to several identification methods, both global samples and within-country changes in creditor rights, different panel spans, and hundreds of control variables. We identify that key origins of the effect of country size on loan pricing are ethnic fractionalization and within-country heterogeneity in economic preferences, which create country risk.

Suggested Citation

  • Manthos Delis & Maria Iosifidi, 2025. "Determinants of global loan pricing: Creditor rights or country size?," Post-Print hal-04982820, HAL.
    • Handle: RePEc:hal:journl:hal-04982820
    DOI: 10.1016/j.jfs.2025.101396
    Note: View the original document on HAL open archive server: https://hal.science/hal-04982820v1
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    References listed on IDEAS

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    More about this item

    Keywords

    Creditor rights; Bank credit; Loan spreads; Country size; Ethnic fractionalization;
    All these keywords.

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