Staying Close to Home? Foreign Bank Participation in Syndicated Loans

We examine the propensity of Australian banks to participate in syndicated loans to corporate borrowers from 12 countries in the Asia-Pacic,region. As in other studies of international asset allocation, we nd that these banks par- ticipate more often, and more intensively, in loans made to Australian rms. However, much of this apparent bias can be attributed to dierences in familiar- ity characteristics { legal systems, culture, banking presence and distance from Australia. As these characteristics are likely to proxy for information availabil- ity, our results provide further support for the view that home bias phenomena are primarily due to information problems. JEL classication: G11, G15, G21 Keywords: home bias; syndicated loans; Asia-Pacic;,country characteristics Staying Close to Home: Foreign Bank Participation in Syndicated,Loans