Elections Hinder Firms’ Access to Credit

In a new paper, we investigate the influence of elections on access to credit for firms. We perform an investigation on large dataset of firms covering 44 developed and developing countries. We find that elections impair access to credit. Specifically, firms are more credit-constrained in election years and pre-election years as elections exacerbate political uncertainty. While lower credit demand is a tangible negative effect of elections, their occurrence per se does not seem to affect credit supply.

Léon F., Weill L. (2022) Elections Hinder Firms’ Access to Credit, SUERF Note brève, N°344, juin.