Securitization and economic activity: The credit composition channel

Ata Bertay, Di Gong and Wolf Wagner ()

Journal of Financial Stability, 2017, vol. 28, issue C, 225-239

Abstract: Using an international panel of 104 countries over the period 1995–2012, we analyze the relationship between country-level securitization and economic activity. Our findings suggest that securitization is negatively related to various proxies of economic activity – even prior to the crisis of 2007–2009. We explain this finding as the results of securitization spurring consumption at the expense of investment and capital formation. Consistent with this, we find that securitization of household loans is negatively associated with economic activity, whereas business securitization displays a weak positive association with it, and that household securitization increases an economy's consumption-investment ratio. Our results inform recent initiatives aimed at reviving securitization markets, as they indicate that the impact of securitization crucially depends on the underlying collateral.

Keywords: Securitization market; Household securitization; Business securitization; Economic growth (search for similar items in EconPapers)
JEL-codes: G01 G21 O16 O40 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1572308916000115
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Securitization and Economic Activity: The Credit Composition Channel (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finsta:v:28:y:2017:i:c:p:225-239

DOI: 10.1016/j.jfs.2016.01.010

Access Statistics for this article

Journal of Financial Stability is currently edited by I. Hasan, W. C. Hunter and G. G. Kaufman

More articles in Journal of Financial Stability from Elsevier
Bibliographic data for series maintained by Catherine Liu ().