Once upon a loan: How folk tales shape access to credit

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11230%2F25%3A10508402" target="_blank" >RIV/00216208:11230/25:10508402 - isvavai.cz</a>
Result on the web
<a href="https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=mMO4zUogCS" target="_blank" >https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=mMO4zUogCS</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.1016/j.jebo.2025.107288" target="_blank" >10.1016/j.jebo.2025.107288</a>

Result language
angličtina
Original language name
Once upon a loan: How folk tales shape access to credit
Original language description
We investigate the effect of folklore on firms' access to credit. Using firm-level data on a large sample of 38,000 firms covering 124 countries and 274 cultural societies over the 2005-2022 period, we test the hypothesis that oral traditions linking risk-taking to success or failure influence access to credit. We find that folklore affects access to credit. Oral traditions associated with successful challenges increase access to credit, while those associated with unsuccessful challenges decrease access to credit. We further show that folklore influences access to credit through borrower discouragement and loan approval. We also find that foreign-owned firms are less sensitive to the influence of folklore, while more developed legal institutions reinforce its impact. We further observe that folklore explains aggregate credit supply at the country level. Using representations of trust in folklore, we find that more trusting societies are associated with more loan approval but lower loan applications, which results from the fact that higher trust encourages informal credit.
Czech name
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Czech description
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Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
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OECD FORD branch
50201 - Economic Theory

Project
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Continuities
I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year
2025
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

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