Transmission of Shocks Through International Lending of Commercial Banks to LDCs

Satoru Shimokawa and Steven C. Kyle

No 127238, Working Papers from Cornell University, Department of Applied Economics and Management

Abstract: We analyze the transmission of shocks through international bank lending, as is suggested in Kaminsky and Reinhart [6], by examining the bank’s international lending behavior. We develop a portfolio selection model, which explicitly includes the economic condition of the bank’s home county. This model is estimated using data from the banks of the six largest international creditor countries over the 1989-99 period. Our results clarify the interrelationship between the condition of banks’ home country and international bank lending. This finding demonstrates two types of transmission of shocks through international bank lending: [i] transmission from a creditor country to debtor countries and [ii] transmission from a debtor country to other debtor countries via a creditor.

Keywords: Agricultural; Finance (search for similar items in EconPapers)
Pages: 26
Date: 2003-08-12
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:cudawp:127238

DOI: 10.22004/ag.econ.127238

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