IDEAS home Printed from https://ideas.repec.org/a/rza/ersawp/vy2023iid29.html
   My bibliography  Save this article

International Lending Channel, Bank Heterogeneity and Capital Inflows (Mis)Allocation

Author

Listed:
  • Lucas A. Mariani
  • Silvia Marchesi

Abstract

This paper explores the role of banks’ heterogeneity in international lending and its impacts on capital inflows allocation across firms by exploiting the inclusion of South Africa into the Citi Group’s World Government Bond Index (WGBI). Using bank-level data, we provide evidence that banks holding sovereign bonds before the inclusion increase credit supply to non-financial firms after the shock. Moreover, less capitalized banks drive these effects. Using firm-level data in South Africa, we then show that credit is allocated to less financially constrained and less productive firms. Consistent with zombie-firms behavior, we find no evidence of a significant improvement in real outcomes after the increase of credit supply to those firms. Our paper adds to the literature by analyzing the interplay between banks’ heterogeneity, capital inflows shocks and capital misallocation.

Suggested Citation

  • Lucas A. Mariani & Silvia Marchesi, 2023. "International Lending Channel, Bank Heterogeneity and Capital Inflows (Mis)Allocation," ERSA Working Paper Series, Economic Research Southern Africa, vol. 0.
    • Handle: RePEc:rza:ersawp:v::y:2023:i::id:29
    as

    Download full text from publisher

    File URL: https://ersawps.org/index.php/working-paper-series/article/view/29/10
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rza:ersawp:v::y:2023:i::id:29. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Maggi Sigg (email available below). General contact details of provider: https://ersawps.org/index.php/working-paper-series/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.