We present evidence from a randomized field experiment in rural Mongolia to assess the poverty impacts of a joint-liability microcredit program targeted at women. We find a positive impact of access to group loans on female entrepreneurship and household food consumption but not on total working hours or income in the household. A simultaneously introduced individual-liability microcredit program delivers no significant poverty impacts. Additional results on informal transfers to families and friends suggest that joint liability may deter borrowers from using loans for noninvestment purposes with stronger impacts as a result. We find no difference in repayment rates between both types of microcredit. (JEL G21, I32, I38, J16, L26, O15, O16)

No abstract

We use panel data on the intra-group ownership structure and balance sheets of 45 of the largest banking groups from 1992 to 2004 to analyse what determines the credit growth of multinational bank subsidiaries. Both home-and host-country conditions and characteristics of the subsidiaries themselves and their parent banks are taken into account. We find that the lending of multinational bank subsidiaries is influenced by substitution effects, in which parent banks trade-off lending in several countries, as well as support effects, in which parent banks support weak subsidiaries. This provides strong evidence for the existence of internal capital markets through which multinational banks manage the credit growth of their subsidiaries. We also find that greenfield subsidiaries are more closely integrated into internal capital markets than subsidiaries that result from a take-over. JEL codes:F15, F23, F36, G21

No abstract

We examine the capital structure dynamics of Central and Eastern European firms to get a better understanding of the quantitative and qualitative development of the financial systems in this region. The dynamic model used endogenizes the target leverage as well as the adjustment speed. It is applied to microeconomic data for ten countries. We find that during the transition process, firms generally increased their leverage, lowering the gap between the actual and the target leverage. Profitability and age are the most robust determinants of capital structure targets. Although banking system development has in general enabled firms to get closer to their leverage targets, information asymmetries between firms and banks are still relatively large. As a result, firms prefer internal finance above bank debt and adjust leverage only slowly.

Using a novel way to identify relationship and transaction banks, we study how banks' lending techniques affect credit constraints of small and medium-sized enterprises across emerging Europe. We link the lending techniques that banks use in the direct vicinity of firms to these firms' credit constraints at two contrasting points of the credit cycle. We show that relationship lending alleviates credit constraints during a cyclical downturn but not during a boom period. The positive impact of relationship lending in a downturn is strongest for smaller and more opaque firms and in regions where the downturn is more severe. Additional evidence suggests that the reduction in credit constraints due to relationship lending helps to mitigate the adverse impact of an economic downturn on local firm growth and does not constitute evergreening of underperforming loans. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means without the prior permission in writing of the publisher nor be issued to the public or circulated in any form other than that in which it is published.Requests for permission to reproduce any article or part of the Working Paper should be sent to the editor at the above address. Ralph De Haas (European Bank for Reconstruction and Development and Tilburg University) Neeltje van Horen (De Nederlandsche Bank and CEPR)February 2015 AbstractUsing a novel way to identify relationship and transaction banks, we study how banks' lending techniques affect credit constraints of small and medium-sized enterprises across emerging Europe. We link the lending techniques that banks use in the direct vicinity of firms to these firms' credit constraints at two contrasting points of the credit cycle. We show that relationship lending alleviates credit constraints during a cyclical downturn but not during a boom period. The positive impact of relationship lending in a downturn is strongest for smaller and more opaque firms and in regions where the downturn is more severe. Additional evidence suggests that the reduction in credit constraints due to relationship lending helps to mitigate the adverse impact of an economic downturn on local firm growth and does not constitute evergreening of underperforming loans (JEL codes: F36; G21; L26; O12; 016).

Zettelmeyer, and numerous participants at various conferences and workshops for comments. Costas Meghir benefited from financial assistance from the Cowles foundation and the Institution for Social and Policy Studies (ISPS) at Yale. This project was conceived with the help of Francesca Cassano and benefited from continuous support from Borislav Petric and Ryan Elenbaum. Carly Petracco provided excellent research assistance. This RCT is registered on www.socialscienceregistry.org under number AEARCTR-0000304. The authors are solely responsible for errors and interpretations of the results, and the views presented do not necessarily reflect those of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

No abstract