What drives credit growth in emerging Asia?

Elekdağ, Selim; Han, Fei

doi:10.1016/j.asieco.2015.03.001

Cited by 19 publications

(13 citation statements)

References 18 publications

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“…() report a positive response of credit after the start of a capital inflow bonanza, the study of Calderón and Servén () finds that few capital inflow bonanzas ended up in a lending boom, even though lending booms were often preceded by these other kinds of booms. Similarly, Elekdag and Wu () and Elekdag and Han (), using a large sample of emerging markets, find that lending booms are mostly explained by domestic factors with little of the variation in credit explained by external factors, including capital inflows. Finally, Schularick and Taylor () finds a low correlation between changes in net inflows and changes in credit in a historical panel of developed economies.…”

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confidence: 89%

“…(), Gourinchas et al . (), Elekdag and Wu (), Calderón and Servén (), Elekdag and Han () and Schularick and Taylor (), which has failed to find a robust causal relationship between surges in capital inflows and lending booms. Furthermore, most baseline lending booms are not associated with contemporaneous or previous‐year bonanzas in the sample used in this article (most lending booms take place without a bonanza; even when many bonanzas are associated with booms) .…”

Section: Do Surges In Capital Inflows Influence the Likelihood Of Banmentioning

confidence: 99%

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Do Surges in International Capital Inflows Influence the Likelihood of Banking Crises?

Caballero

2014

Econ J

148

122

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This article asks whether capital inflows bonanzas increase the probability of banking crises and whether this occurs through a lending boom mechanism. Results indicate that bonanzas more than triple the odds of a crisis, raising its probability to 14% (from an unconditional probability of 4%). This effect exists in the absence of a lending boom and is found in both net and gross inflows bonanzas. This effect is driven by portfolio-equity and debt flows. While the effect of debt is channelled through excessive lending, the effect of portfolio-equity flows is present even in the absence of a lending boom.

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mentioning

confidence: 89%

Section: Do Surges In Capital Inflows Influence the Likelihood Of Banmentioning

confidence: 99%

Do Surges in International Capital Inflows Influence the Likelihood of Banking Crises?

Caballero

2014

Econ J

148

122

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“…Focusing on a large panel of non-transition developing and industrialised countries, Cottarelli et al (2005) showed that bank lending is positively related to GDP per capita and financial liberalisation but negatively affected by public debt. Elekdag and Han (2012) analysed the main drivers of credit growth in 10 emerging Asia countries over the period 1989:Q1-2010:Q4. They showed that greater exchange rate flexibility promote financial stability, which reduces the role of external factors affecting domestic credit dynamics.…”

Section: Literature Reviewmentioning

confidence: 99%

The Determinants of Credit Growth in Lebanon

Awdeh¹

2016

IBR

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This study aims at defining the credit growth determinants in Lebanon by exploiting a panel data of 34 commercial banks over the period [2000][2001][2002][2003][2004][2005][2006][2007][2008][2009][2010][2011][2012][2013][2014][2015]. The empirical results show that deposit growth, GDP growth, inflation, and money supply, all boost bank credit to the resident private sector. Conversely, credit risk, lending interest rate, T-bill rate, public borrowing, and remittance inflows decrease loan growth. We extend our analysis and detect the impact of one year lag of all exploited variables in order to find out if they have a delayed impact on credit growth, where we find several different results. For instance, lag LLP recorded the opposite effect of LLP; ROA does not affect credit growth, whereas its lag lowers credit growth; the impact of a change in money supply amplifies considerably after one year; and finally, the negative impact of remittances fades away after one year.

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“…Following these potential determinants of domestic credits, we also use interest rates (measured by deposit rate and lending rate), inflation (measured by the consumer price index), and exchange rate against the USD in the estimations. Besides, a stable economic performance, which is regulated by the yearly growth rate of GDP, can positively affect the level of domestic credits (Elekdag & Han, 2015). The data of these variables are also downloaded from World Bank (2020).…”

Section: Research Objective Methodology and Datamentioning

confidence: 99%

The Impact of Geopolitical Risks on Financial Development: Evidence from Emerging Markets

Lu¹,

Gözgör²,

Huang³

et al. 2020

JOC

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This paper aims to investigate the effect of geopolitical risks on financial development (measured by domestic credit to the private sector) in a panel dataset of 18 emerging markets over the period 1985-2018. The results from the fixed-effects estimations indicate that an increase in geopolitical risks leads to a lower level of domestic credit to the private sector. The findings from the bias-corrected least-squares dummy variable estimations also confirm that geopolitical risks impacts negatively on domestic credit to the private sector. In terms of controls, we have found that per capita income and broad money are positively associated with domestic lending. Further, external imbalances were found to suppress domestic credit in emerging markets. Various additional controls were then included to address potential omitted variable bias. Moreover, we utilized multiple robustness checks, such as excluding countries from different continents as well as extracting outlier observations. According to the findings from these robustness checks, the negative impact of geopolitical risks on domestic lending is statistically and economically robust. To the best of the author's knowledge, this paper is the first to provide evidence for the negative impact of geopolitical risks on financial development in emerging markets, the economic performance of which can slow down as competitiveness deceases due to concomitant threats.

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What drives credit growth in emerging Asia?

Cited by 19 publications

References 18 publications

Do Surges in International Capital Inflows Influence the Likelihood of Banking Crises?

Do Surges in International Capital Inflows Influence the Likelihood of Banking Crises?

The Determinants of Credit Growth in Lebanon

The Impact of Geopolitical Risks on Financial Development: Evidence from Emerging Markets

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