Determinants of Bank Long-term Lending Behavior: Evidence from Russia

Lucy Chernykh () and Alexandra K. Theodossiou
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Lucy Chernykh: Bowling Green State University, USA
Alexandra K. Theodossiou: Texas A&M University, Corpus Christi, USA

Multinational Finance Journal, 2011, vol. 15, issue 3-4, 193-216

Abstract: We investigate the determinants of the banks' propensity to make long-term business loans in an emerging market context. Using a large sample of Russian banks, we find that the median bank allocates only 0.5% of its assets in long-term business loans and that there is wide cross-sectional variation in this ratio among banks. A bank's ability to extend long-term business loans depends on its size, capitalization, and the availability of long-term liabilities rather than its type of ownership. These results highlight the importance of bank-level (supply side) constraints in extending vital long-term credit to firms.

Keywords: emerging market banking; long-term business loans; Russia (search for similar items in EconPapers)
JEL-codes: C21 O16 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:mfj:journl:v:15:y:2011:i:3-4:p:193-216

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