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The determinants of global bank lending: Evidence from bilateral cross-country data


  • Aysun, Uluc
  • Hepp, Ralf


This paper finds that factors determined outside of a country, at the quarterly frequency and especially after 2008, are more closely related to the global bank loans it receives. These loans are generally more stable when global banks face more competition and have a higher presence in the recipient country. We obtain our results by using bilateral lending data from 15 countries and a unique methodology to identify and compare the independent effects of external and internal factors. We identify theoretical mechanisms that can explain our empirical findings and draw more detailed inferences for competition and global bank presence by solving a simple model of global banking.

Suggested Citation

  • Aysun, Uluc & Hepp, Ralf, 2016. "The determinants of global bank lending: Evidence from bilateral cross-country data," Journal of Banking & Finance, Elsevier, vol. 66(C), pages 35-52.
  • Handle: RePEc:eee:jbfina:v:66:y:2016:i:c:p:35-52
    DOI: 10.1016/j.jbankfin.2015.11.020

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    Cited by:

    1. repec:bal:journl:2256-0742:2017:3:1:7 is not listed on IDEAS
    2. Avdjiev, Stefan & Aysun, Uluc & Hepp, Ralf, 2019. "What drives local lending by global banks?," Journal of International Money and Finance, Elsevier, vol. 90(C), pages 54-75.
    3. repec:eee:ecmode:v:70:y:2018:i:c:p:159-173 is not listed on IDEAS
    4. Uluc Aysun, 2015. "The effects of global bank competition and presence on local business cycles: The Goldilocks principle does not apply to global banking," Working Papers 2015-02, University of Central Florida, Department of Economics, revised Oct 2015.

    More about this item


    Cross-country loans; Global banks; Competition; Overlapping generations model;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages


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