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Who Gets the Credit? And Does it Matter? Household vs Firm Lending Across Countries

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  • Beck, T.H.L.
  • Büyükkarabacak, B.
  • Rioja, F.
  • Valev, N.

    (Tilburg University, Center for Economic Research)

Abstract

While theory predicts different effects of household credit and enterprise credit on the economy, the empirical literature has mainly used aggregate measures of overall bank lending to the private sector. We construct a new dataset from 45 developed and developing countries, decomposing bank lending into lending to enterprises and lending to households and assess the different effects of these two components on real sector outcomes. We find that: 1) enterprise credit raises economic growth whereas household credit has no effect; 2) enterprise credit reduces income inequality whereas household credit has no effect; and 3) household credit is negatively associated with excess consumption sensitivity, while there is no relationship between enterprise credit and excess consumption sensitivity.

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Bibliographic Info

Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2009-41.

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Date of creation: 2009
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Handle: RePEc:dgr:kubcen:200941

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Web page: http://center.uvt.nl

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Keywords: Financial Intermediation; Household Credit; Firm Credit;

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Citations

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Cited by:
  1. Brown, Martin & Hoffmann, Matthias, 2013. "Mortgage Relationships," Working Papers on Finance 1310, University of St. Gallen, School of Finance.
  2. Thorsten Beck, 2012. "Concluding Observations," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
  3. Beck, T.H.L. & Degryse, H.A. & Kneer, E.C., 2012. "Is More Finance Better? Disentangling Intermediation and Size Effects of Financial Systems," Discussion Paper 2012-060, Tilburg University, Center for Economic Research.
  4. Tullio Jappelli & Marco Pagano & Marco di Maggio, 2008. "Households’ Indebtedness and Financial Fragility," CSEF Working Papers 208, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 09 Sep 2010.
  5. Enrico Berkes & Ugo Panizza & Jean-Louis Arcand, 2012. "Too Much Finance?," IMF Working Papers 12/161, International Monetary Fund.
  6. Gunther Capelle-Blancard & Claire Labonne, 2011. "More Bankers, More Growth? Evidence from OECD Countries," Working Papers 2011-22, CEPII research center.
  7. Gründler, Klaus & Weitzel, Jan, 2013. "The financial sector and economic growth in a panel of countries," Wirtschaftswissenschaftliche Beiträge 123, Julius-Maximilians-Universität Würzburg, Lehrstuhl für Volkswirtschaftslehre, insbes. Wirtschaftsordnung und Sozialpolitik.
  8. Stefano Pagliari & Clive Briault & Alistair Milne & Patricia Jackson & Vicky Pryce & David T. Llewellyn & David Lascelles & Thorsten Beck, 2012. "Future Risks and Fragilities for Financial Stability," SUERF Studies, SUERF - The European Money and Finance Forum, number 2012/3 edited by David T. Llewellyn & Richard Reid.
  9. Bhattacharyya, Sambit & Hodler, Roland, 2014. "Do Natural Resource Revenues Hinder Financial Development? The Role of Political Institutions," World Development, Elsevier, vol. 57(C), pages 101-113.
  10. Grydaki, Maria & Bezemer, Dirk, 2013. "Did Credit Decouple from Output in the Great Moderation?," MPRA Paper 47424, University Library of Munich, Germany.
  11. Giannetti, Caterina & Jentzsch, Nicola, 2013. "Credit reporting, financial intermediation and identification systems: International evidence," Journal of International Money and Finance, Elsevier, vol. 33(C), pages 60-80.

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