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 language | English |
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Pages (from-to) | 107-123 |
Number of pages | 18 |
Journal | International Management |
Volume | 25 |
Issue number | 2 |
DOIs | |
Publication status | Published - 27 May 2021 |
Keywords
- Social Capital
- Loan cost
- Lender
- Borrower