Elections hinder firms' access to credit

Arbeitspapier

To analyze whether the occurrence of elections affects access to credit for firms, we perform an investigation using firm-level data covering 44 developed and developing countries. The results show that elections impair access to credit. Specifically, firms are more credit-constrained in election years and pre-election years as elections exacerbate political uncertainty. While lower credit demand is a tangible negative effect of elections, their occurrece per se does not seem to affect credit supply. We further establish that the design of political and financial systems affects how elections influence access to credit.

Object Details

• ISBN: 978-952-323-401-7
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: BOFIT Discussion Papers ; No. 3/2022

Classification and Topics

• Classification: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
• Subject: elections ; access to credit ; credit constraints

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Léon, Florian ; Weill, Laurent
• Event: Veröffentlichung
• (who): Bank of Finland, Bank of Finland Institute for Emerging Economies (BOFIT)
• (where): Helsinki
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/249607
• Last update: 10.03.2025, 11:43 AM CET