Foreign institutional ownership and cross-border lending

Li, Xi ORCID: 0000-0002-9870-9661 and Lou, Yun (2024) Foreign institutional ownership and cross-border lending. .

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Abstract

We study the role of foreign institutional investors in cross-border lending. We find that a borrower’s foreign institutional ownership is positively associated with the likelihood of foreign banks leading a loan syndicate. This relation is stronger among borrowers with more opaque information environment and when foreign institutional shareholders have better access to soft information. We also find that foreign banks are more likely to extend loans to borrowers with foreign institutional shareholders that are headquartered in the same country or members of the same loan associations. These results are consistent with foreign institutional shareholders facilitating cross-border lending by reducing monitoring costs and information frictions faced by foreign lenders.

Item Type:	Monograph (Working Paper)
Additional Information:	© 2024 The Author
Divisions:	Accounting
Subjects:	H Social Sciences > HF Commerce > HF5601 Accounting H Social Sciences > HG Finance
JEL classification:	G - Financial Economics > G2 - Financial Institutions and Services > G23 - Pension Funds; Other Private Financial Institutions G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure
Date Deposited:	30 Jul 2024 16:24
Last Modified:	11 Dec 2024 19:54
URI:	http://eprints.lse.ac.uk/id/eprint/124422

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