The Cascade Effect on Lending Conditions: Evidence from the Syndicated Loan Market

Material TypeArticleLanguageEnglish
TitleThe Cascade Effect on Lending Conditions: Evidence from the Syndicated Loan Market Author(S)Wei-Shao Wu (Author)
Abstract  This paper investigates, both theoretically and empirically, how interactions among potential lenders may influence contract terms via informational cascade in the syndicated loan market. Our model shows that the ex-post observed interest rate is higher and the probability of syndication failure is lower when potential lenders can only observe the decisions of their predecessors versus when they can freely communicate with each other. ...Paginationp 1247–1275
SubjectEconomicsDescriptorsEconomics
Journal TitleJournal of Business Finance & Accounting  
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