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Bank Lending in the Knowledge Economy

Giovanni DellAriccia, Dalida Kadyrzhanova, Lev Ratnovski () and Camelia Minoiu ()
Authors registered in the RePEc Author Service: Giovanni Dell'ariccia ()

No 12994, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study bank portfolio allocations during the transition of the real sector to a knowledge economy in which firms increasingly use intangible assets. We show that higher corporate investment in intangible assets slows down banks' commercial lending. Banks reallocate the resulting lending capacity to other assets, notably mortgages. The findings are consistent with financial intermediation frictions due to lower collateral value of corporate intangible assets. Additional tests rule out alternative explanations such as higher mortgage demand. We estimate that higher corporate intangible assets conservatively explain 25-40% of the decline in bank commercial lending since the mid-1980s.

Keywords: bank lending; commercial loans; corporate intangible assets; real estate loans (search for similar items in EconPapers)
JEL-codes: E22 E44 G21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-knm and nep-mac
Date: 2018-06
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