Determinants of Foreign Currency Loans in CESEE Countries: A Meta-Analysis

Jesus Crespo Cuaresma, Jarko Fidrmuc and Mariya Hake

Focus on European Economic Integration, 2011, issue 4, 69-87

Abstract: In this paper, we analyze the growing literature on determinants of foreign currency loans in the countries of Central, Eastern and Southeastern Europe (CESEE), applying a metaregression approach. We consider the seven most common determinants presented in the literature and aim at obtaining a more clear-cut picture behind various effects related to differences in methods and data characteristics. In our meta-analysis we apply two alternative estimation methods and identify exchange rate volatility, foreign currency deposits and the minimum variance portfolio (i.e. the ratio of inflation volatility to real exchange rate volatility) as the most robust determinants of foreign currency loans. Our findings indicate that the results reported in the literature are systematically influenced by model specification, the econometric methodology applied and the country samples included in the papers.

Keywords: Central and Eastern Europe; foreign currency loans; metaregression; random effects maximum likelihood (search for similar items in EconPapers)
JEL-codes: C5 E52 F31 O57 P20 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (23)

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