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Long-Term Finance Provision: National Development Banks VS. Commercial Banks

2020-04-12

Content introduction:

No. E2020002

Long-Term Finance Provision: National Development Banks VS. Commercial Banks 

Bo Hu, Alfredo Schclarek, Jiajun Xu, and Jianye Yan

January 2020 

 

Abstract:

This paper examines whether national development banks (NDBs) lend longer than commercial banks. Using a new, hand-collected dataset on development finance institutions worldwide matched with the bank-level data from BankFocus, we find that the maturity of NDB loans is higher than that of commercial bank loans and this finding is statistically significant after controlling for macroeconomic and bank-level factors. Furthermore, we find that NDBs in middle-income countries are more likely to provide long-term loans that those in low-income countries or high-income countries. Our paper suggests potential explanatory variables in explaining this stylized fact. 

 

Keywords:

national development banks, maturity, bank loans, state ownership 

 

JEL classification: G01; G21; G28; H81; E51; E44 

 

The series of New Structural Economics Working Papers aims to encourage academic scholars and students from all over the world to conduct academic research in the field of new structural economics. Excellent papers are selected irregularly and are offered academic suggestions and recommendation, but the published working papers are not intended to represent official communication from INSE.