Political Uncertainty and the Choice of Debt Sources

Bennasr, H.; Bouslimi, L.; Ebrahim, M.S.; Zhong, R.

Abstract

This paper studies the effect of political uncertainty on the choice of debt sources. We find a positive relationship between political uncertainty stemming from elections and the proportion of bank loans over total debts, especially when elections are closely contested. Furthermore, this relationship is stronger in opaque firms and more financially constrained firms as well as firms from countries with weaker shareholder rights, labor protection, creditor rights and national governance.

Citation

Bennasr, H., Bouslimi, L., Ebrahim, M., & Zhong, R. (2020). Political Uncertainty and the Choice of Debt Sources. Journal of International Financial Markets, Institutions and Money, 64, Article 101142. https://doi.org/10.1016/j.intfin.2019.101142

• Journal Article Type: Article
• Acceptance Date: Nov 2, 2019
• Online Publication Date: Nov 5, 2019
• Publication Date: Jan 31, 2020
• Deposit Date: Nov 9, 2019
• Publicly Available Date: Nov 5, 2020
• Journal: Journal of International Financial Markets, Institutions and Money
• Print ISSN: 1042-4431
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 64
• Article Number: 101142
• DOI: https://doi.org/10.1016/j.intfin.2019.101142
• Public URL: https://durham-repository.worktribe.com/output/1283725