Who gets the credit ? and does it matter ? household vs. firm lending across countries

Thorsten Beck, Berrak Buyukkarabacak, Felix Rioja and Neven Valev
Authors registered in the RePEc Author Service: Berrak BAHADIR

No 4661, Policy Research Working Paper Series from The World Bank

Abstract: While the theoretical and empirical finance literature has focused almost exclusively on enterprise credit, about half of credit extended by banks to the private sector in a sample of 45 developing and developed countries is to households. The share of household credit in total credit increases as countries grow richer and financial systems develop. Cross-country regressions, however, suggest a positive and significant impact on gross domestic product per capita growth only of enterprise but not household credit. These two findings together partly explain why previous studies have found a small or insignificant effect of finance on growth in high-income countries. In addition, countries with a lower share of manufacturing, a higher degree of urbanization, and more market-oriented financial systems have a higher share of household credit. It is thus mostly socio-economic trends that determine credit composition, while policies influencing banking market structure and regulatory policies are not robustly related to credit composition.

Keywords: Access to Finance; Banks&Banking Reform; Economic Theory&Research; Debt Markets (search for similar items in EconPapers)
Date: 2008-07-01
New Economics Papers: this item is included in nep-ban and nep-dev
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Citations: View citations in EconPapers (30)

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Related works:
Journal Article: Who Gets the Credit? And Does It Matter? Household vs. Firm Lending Across Countries (2012)
Working Paper: Who Gets the Credit? And Does It Matter? Household vs. Firm Lending across Countries (2009)
Working Paper: Who Gets the Credit? And Does it Matter? Household vs Firm Lending Across Countries (2009)
Working Paper: Who Gets the Credit? And Does it Matter? Household vs Firm Lending Across Countries (2009)
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