Social capital and cost of bank loans during the financial crisis

Abdelmajid Hmaittane, Mohamed Mnasri, Kais Bouslah, Bouchra M’Zali

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Abstract

This study examines the effect of the lender’s social capital on the link between the borrower’s social capital and the cost of bank loans. We exploit the last financial crisis as an exogenous shock to trust during which social capital becomes more valuable. Our findings suggest that when a lender’s social capital is high, borrowers with high social capital pay 46.22 basis points less on their bank loans than those with low social capital.
Original languageEnglish
Pages (from-to)107-123
Number of pages18
JournalInternational Management
Volume25
Issue number2
DOIs
Publication statusPublished - 27 May 2021

Keywords

  • Social Capital
  • Loan cost
  • Lender
  • Borrower

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