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

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

Research output: Working paperDiscussion paperOther research output

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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.
Original languageEnglish
Place of PublicationTilburg
PublisherFinance
Number of pages41
Volume2009-41
Publication statusPublished - 2009

Publication series

NameCentER Discussion Paper
Volume2009-41

Fingerprint

Household
Lending
Credit
Bank lending
Real sector
Developing countries
Private sector
Economic growth
Income inequality
Developed countries

Keywords

  • Financial Intermediation
  • Household Credit
  • Firm Credit

Cite this

Beck, T. H. L., Büyükkarabacak, B., Rioja, F., & Valev, N. (2009). Who Gets the Credit? And Does it Matter? Household vs Firm Lending Across Countries. (CentER Discussion Paper; Vol. 2009-41). Tilburg: Finance.
Beck, T.H.L. ; Büyükkarabacak, B. ; Rioja, F. ; Valev, N. / Who Gets the Credit? And Does it Matter? Household vs Firm Lending Across Countries. Tilburg : Finance, 2009. (CentER Discussion Paper).
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Beck, THL, Büyükkarabacak, B, Rioja, F & Valev, N 2009 'Who Gets the Credit? And Does it Matter? Household vs Firm Lending Across Countries' CentER Discussion Paper, vol. 2009-41, Finance, Tilburg.

Who Gets the Credit? And Does it Matter? Household vs Firm Lending Across Countries. / Beck, T.H.L.; Büyükkarabacak, B.; Rioja, F.; Valev, N.

Tilburg : Finance, 2009. (CentER Discussion Paper; Vol. 2009-41).

Research output: Working paperDiscussion paperOther research output

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Beck THL, Büyükkarabacak B, Rioja F, Valev N. Who Gets the Credit? And Does it Matter? Household vs Firm Lending Across Countries. Tilburg: Finance. 2009. (CentER Discussion Paper).