Tales that cost: Folklore and bank loan spreads
研究欧洲企业银团贷款数据发现，贷款方文化背景中民间传说关于挑战失败的故事越多，贷款利差越高，说明文化叙事影响现代金融合同定价。
This paper investigates whether cultural narratives embedded in folklore influence the pricing of syndicated loans. We combine loan-level data for European companies with the cross-cultural dataset of oral traditions compiled by Michalopoulos and Xue (2021) to examine whether stories about risk-taking shape loan spreads. We find that the presence of challenge-related motifs in a lender's cultural background is associated with higher spreads. More specifically, tales that portray unsuccessful outcomes lead to significantly higher loan spreads, while those depicting successful risk-taking have no discernible effect. A greater prevalence of failure over success in challenge-related folklore robustly predicts higher spreads across specifications. These findings suggest that cultural beliefs about risk—transmitted through folklore—affect how lenders perceive borrower uncertainty. By shaping the soft information environment in which credit decisions are made, ancestral narratives continue to influence the terms of modern financial contracts.