Do the drivers of loan dollarisation differ between cesee and Latin America? a meta-analysis

Mariya Hake, Fernando López-Vicente () and Luis Molina Sánchez
Additional contact information
Mariya Hake: Oesterreichische National Bank
Fernando López-Vicente: Banco de España
Authors registered in the RePEc Author Service: Fernando Salvador López Vicente

No 1406, Working Papers from Banco de España

Abstract: In this paper we compare the determinants of loan dollarisation in two emerging market regions, namely Central, Eastern and Southeastern Europe (CESEE) and Latin America, by means of a meta-analysis of 32 studies that provide around 1,200 estimated coefficients for six drivers of foreign currency lending. One common pattern we identify is that macroeconomic instability (as expressed by inflation volatility) and banks’ funding in foreign currency play a significant role in explaining loan dollarisation in both regions. By contrast, the interest rate differential appears to be a key determinant only in Latin America, while the positive impact of exchange rate volatility on dollarisation implies a more prominent role for supply factors in the CESEE region. While the robustness of the results has been verified, our meta-analysis shows that estimates reported in the literature tend to be influenced by study characteristics such as the methodology applied and the data used.

Keywords: foreign currency loans; CESEE; Latin America; meta-regression; random effects maximum likelihood (search for similar items in EconPapers)
JEL-codes: C5 E52 F31 O57 P20 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2014-04
New Economics Papers: this item is included in nep-lam, nep-mac and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Do the Drivers of Loan Dollarization Differ between CESEE and Latin America? A Meta-Analysis (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:1406

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