The effect of banking regulation on cross-border lending

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Effect of Banking Regulation on Cross-Border Lending* Abstract Banking regulations often differ between countries. For instance, some regulators oblige banks to document their evaluation of firms' creditworthiness and thereby determine the banks' lending technology. We study in a theoretical model how differences in regulation influence competition between domestic and foreign banks and the effect of regulatory harmonization on cross-border lending. We predict that lending rates are lower and access to credit is easier for firms located in the border region if regulation differs. We confirm the model's predictions using unique bank-and firm-level data from Germany by employing a difference-in-difference estimation. Terms of use: Documents in EconStor mayJEL Classification: G21, G18, F23.

The Role of Regulatory Arbitrage in U.S. Banks' International Flows: Bank‐level Evidence

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The Transmission of Bank Funding to Corporate Loans: Deleveraging in Germany

“…We exclude outliers and errors defined by an implicit rate above 30 % lower than 0 %, which corresponds approximately to the lowest and top 5 percent of its distribution. Implicit lending rates for firms are for example used by Benito and Whitley (2003) or Fidrmuc and Hainz (2013). On average an I LR of 8.73 % is obtained.…”

Harmonization of the ifo Business Survey’s Micro Data

“…This is mainly due to the fact that the industry-specific surveys are heterogeneous in the level of observational units (product vs. firm) as well as in the industry classification systems used in the micro data. Hence, researchers usually restricted their analyses to the subset of manufacturing firms (e. g. Pesaran/Timmermann 2009;Bachmann et al 2013;Carstensen et al 2013;Strasser 2013;Fidrmuc/Hainz 2013;Bachmann/Elstner 2015;Bachmann et al 2018;Massenot/Pettinicchi 2018;Huber 2018;Bachmann et al 2019;and Enders et al 2019a,b).…”