Abstract
This paper studies the impact of the recent China–U.S. trade war on Chinese firms’ international borrowing. We find a significant and persistent loan cutback of Chinese firms from the U.S. lending syndicates after the Section 301 investigations. The reductions are in terms of the equilibrium aggregate number of loan issuances, as well as loan amounts. We highlight that the drop is a supply-dominated contraction since the equilibrium interest rate have increased in the wake of the shock. Moreover, we document longer loan maturities and a higher likelihood of secured loan formation between China borrower–U.S. lender pairs.
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