The Impacts of Bank Loans on Economic Development: An Implication for East Asia from an Equilibrium Contract Theory
In: Regional and Global Capital Flows: Macroeconomic Causes and Consequences, NBER-EASE Volume 10
AbstractIn this paper, we first show that middle-term and long-term commercial bank loans were less mobile forms of external liabilities but that a large fraction of external bank debt had been financed by short-term loans in a large number of developing countries. We then present a simple theoretical model where the vulnerable financial structure in developing countries might emerge as a result of efficient monitoring activities by competitive private banks. In the model, we assume both asymmetric information and liquidation risk in the international financial market. The existence of asymmetric information calls for the role of a short-term lender in monitoring borrowers' performance. However, since short-term debt can be a source of liquidity problems, total effects of efficient monitoring on economic welfare might be largely reduced when it increases the possibility of a liquidity shortfall.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
This chapter was published in:
This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 10733.
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- Shin-ichi Fukuda, 1999. "The Impacts of Bank Loans on Economic Development: An Implication for East Asia from an Equilibrium Contract Theory," CIRJE F-Series CIRJE-F-58, CIRJE, Faculty of Economics, University of Tokyo.
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Shin-ichi Fukuda & Yoshifumi Kon, 2010.
"Macroeconomic Impacts of Foreign Exchange Reserve Accumulation : Theory and International Evidence,"
Macroeconomics Working Papers
23012, East Asian Bureau of Economic Research.
- Fukuda, Shin-ichi & Kon, Yoshifumi, 2010. "Macroeconomic Impacts of Foreign Exchange Reserve Accumulation: Theory and International Evidence," ADBI Working Papers 197, Asian Development Bank Institute.
- Shin-ichi Fukuda & Yoshifumi Kon, 2010. "Macroeconomic Impacts of Foreign Exchange Reserve Accumulation: Theory and International Evidence," Working Papers id:3106, eSocialSciences.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.