Labour unions and global bank loan market

Yin Siang Huang, Chih-Yung Lin*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

This article attempts to collect a data set of labour unions in global 500 biggest banks and investigate whether labour unions of banks influence the designing of bank loan contracts. We use global syndicate loan market to examine this issue. For simplicity, banks with and without labour unions are referred to as ‘unionized banks’ and ‘nonunionized banks’, respectively. We find that unionized banks tend to loosen their lending standard in the bank loan contract: unionized banks are more likely to charge lower loan spread and favourable nonprice terms compared with nonunionized banks. Hence, our results support that unionized banks tend to lend more loans to reduce the negative effect of labour unions.

Original languageEnglish
Pages (from-to)401-408
Number of pages8
JournalApplied Economics Letters
Volume26
Issue number5
DOIs
StatePublished - 12 Mar 2019

Keywords

  • bank loan contract
  • global syndicate loan market
  • Labour union
  • loan spread

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