The Maturity Structure of Bank Credit: Determinants and Effects on Economic Growth

SSRN Electronic Journal 04/2008; DOI: 10.2139/ssrn.1121840


We investigate a new data set on the maturity of bank credit to the private sector in 74 countries. We show that credit maturity is longer in countries with strong institutions, low inflation, large financial markets, and where banks share information about borrowers. Furthermore, we extend the finance and growth literature by showing that credit maturity matters for economic growth. Economic growth is enhanced in countries where agents have access to long-term financing. Therefore, weak institutions, high inflation and other variables that reduce credit maturity have an impact on economic growth via their influence on credit maturity. The estimated effects are substantial in size.

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Available from: Nikola Tasić, Aug 02, 2014
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    • "This may require the transformation of the dependent variable using a log-odds ratio (log(y/1−y)). However, the coefficient estimates using the log-odds ratio are difficult to interpret in a panel setting and therefore we follow the previous literature (Demirgüç-Kunt and Maksimovic 1999; Rodrik and Velasco 1999; Tasić and Valev 2008; Valev 2006; 2007 "
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