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- Publisher
- Springer Journals
- Copyright
- Copyright © The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2022
- ISSN
- 0920-8550
- eISSN
- 1573-0735
- DOI
- 10.1007/s10693-022-00377-0
- Publisher site
- See Article on Publisher Site
Abstract
We find strong evidence that investor diversity is beneficial to loan liquidity: More diverse syndicates, as measured by the number of investor-types or the concentration of loan shares by investor-type, hold loans that have lower quoted bid-ask spreads in the secondary market. These results are robust, and do not appear to be driven by investors’ borrower/loan selection. Further, they are not driven by the presence of any particular type of investors. Our findings are consistent with Goldstein and Yang (J Financ 70:1723–1765 2015) insight that there is a strategic complementarity between different groups in trading on their information and producing information.
Journal
Journal of Financial Services Research – Springer Journals
Published: Jun 1, 2023
Keywords: Loan syndicate; Investor diversity; Loan market liquidity; Loan bid-ask spreads; Informed investors; G14; G21; G22; G23