Determinants of International Bank Lending from the Developed World to East Asia

Reza Siregar and Keen Meng Choy ()

MPRA Paper from University Library of Munich, Germany

Abstract: The reversal of capital flows from the banking sector, rather than portfolio equity investment, has long been considered a main reason for the severity of the East Asian financial crisis of the late 1990s. This study analyzes the factors behind the boom and bust of bank lending, focusing on loans from private banks in seven OECD countries to nine East Asian economies during the 1990–2004 period. Our findings suggest that political instability and weaknesses in the legal, judicial, and bureaucratic systems help explain the continued stagnation in lending after the financial crisis. Thus, institutional reforms are critical for East Asia to successfully compete for international bank financing.

Keywords: Foreign Bank Loans; East Asia; Gravity Model; Trade Intensity; Financial Risk; Law and Order; Bureaucratic Quality (search for similar items in EconPapers)
JEL-codes: C23 F11 F34 G21 (search for similar items in EconPapers)
Date: 2009-03-30
New Economics Papers: this item is included in nep-ban and nep-sea
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Citations: View citations in EconPapers (12)

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Related works:
Journal Article: Determinants of International Bank Lending from the Developed World to East Asia (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:14989

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