We take advantage of a new composite measure of political risk (Hassan et al., 2019) to study the effects of firm-level political risk on private debt markets. First, we use panel data tests and exploit the redrawing of US congressional districts to uncover plausibly exogenous variation in firm-level political risk. We show that borrowers’ political risk is linked to interest rates set by lenders. Second, we test for the transmission of political risk from lenders to borrowers. We predict and find that lender-level political risk propagates to borrowers through lending relationships. Our analysis allows for endogenous matching between lenders and borrowers and indicates the presence of network effects in diffusing political risk throughout the economy. Finally, we introduce new text-based methods to analyze the distinct sources of political risk to lenders and borrowers and provide textual evidence of the transmission of political risk from lenders to borrowers.

中文翻译：

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公司层面的政治风险和信贷市场

我们利用一种新的政治风险综合衡量标准（Hassan et al., 2019）来研究公司层面的政治风险对私人债务市场的影响。首先，我们使用面板数据测试并利用美国国会选区的重新划分来揭示公司层面政治风险的合理外生变化。我们表明借款人的政治风险与贷款人设定的利率相关。其次，我们测试政治风险从贷款人到借款人的传递。我们预测并发现，贷款人层面的政治风险通过贷款关系传播给借款人。我们的分析允许贷款人和借款人之间存在内生匹配，并表明在整个经济中分散政治风险方面存在网络效应。最后，我们引入新的基于文本的方法来分析贷款人和借款人政治风险的不同来源，并提供政治风险从贷款人向借款人传递的文本证据。