Political uncertainty and the choice of debt sources

Hamdi Ben-Nasr, Lobna Bouslimi, M. Shahid Ebrahim, Rui Zhong

Research output: Contribution to journalArticle

1 Citation (Scopus)

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.

Original languageEnglish
Article number101142
JournalJournal of International Financial Markets, Institutions and Money
Volume64
DOIs
Publication statusPublished - Jan 2020

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