IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/2017-031.html
   My bibliography  Save this paper

What Influences Bank Lending in Saudi Arabia?

Author

Listed:
  • Mr. Ken Miyajima

Abstract

Determinants of bank-level credit growth in Saudi Arabia are investigated by applying a panel approach to data spanning 2000–15. Strong bank balance sheet conditions, economic activity, and oil prices support bank lending. Reduced bank concentration appears to have helped. Lending remained robust in 2015 despite oil prices having declined, helped by strong bank balance sheets and a reduction in bank holdings of “excess liquidity”. To support bank lending in the period ahead, bank balance sheets need to remain strong. Fiscal adjustment and a reduced reliance on banks to finance the budget deficit would support credit provision to the private sector.

Suggested Citation

  • Mr. Ken Miyajima, 2017. "What Influences Bank Lending in Saudi Arabia?," IMF Working Papers 2017/031, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2017/031
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=44657
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Brahim Guizani, 2015. "Capital requirements, banking supervision and lending behavior: evidence from Tunisia," Middle East Development Journal, Taylor & Francis Journals, vol. 7(2), pages 175-194, July.
    2. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    3. Bank for International Settlements, 2010. "The global crisis and financial intermediation in emerging market economies," BIS Papers, Bank for International Settlements, number 54, October –.
    4. Emanuel Kohlscheen & Ken Miyajima, 2015. "The transmission of monetary policy in EMEs in a changing financial environment: a longitudinal analysis," BIS Working Papers 495, Bank for International Settlements.
    5. Levine, Ross, 2005. "Finance and Growth: Theory and Evidence," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934, Elsevier.
    6. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, February.
    7. Adolfo Barajas & Ralph Chami & Seyed Reza Yousefi, 2016. "The Finance and Growth Nexus Re-Examined: Do All Countries Benefit Equally?," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 1(5), pages 5-38, June.
    8. Miyajima Ken, 2017. "An Empirical Investigation of Oil-Macro-financial Linkages in Saudi Arabia," Review of Middle East Economics and Finance, De Gruyter, vol. 13(2), pages 1-15, August.
    9. Mr. Ralph Chami & Mr. Raphael A Espinoza & Mr. Adolfo Barajas & Mr. Heiko Hesse, 2010. "Recent Credit Stagnation in the Mena Region: What to Expect? What Can Be Done?," IMF Working Papers 2010/219, International Monetary Fund.
    10. Asli Demirgüç-Kunt & Ross Levine, 2008. "Finance, Financial Sector Policies, and Long-Run Growth," World Bank Publications - Books, The World Bank Group, number 28021.
    11. Ghosh Saibal, 2013. "Funding Structure, Procyclicality and Lending: Evidence from GCC Banks," Review of Middle East Economics and Finance, De Gruyter, vol. 9(2), pages 241-270, August.
    12. Guodong Chen & Mr. Yi Wu, 2014. "Bank Ownership and Credit Growth in Emerging Markets During and After the 2008–09 Financial Crisis — A Cross-Regional Comparison," IMF Working Papers 2014/171, International Monetary Fund.
    13. Vahram Stepanyan & Kai Guo, 2011. "Determinants of Bank Credit in Emerging Market Economies," IMF Working Papers 2011/051, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Almir ALIHODŽIĆ & İbrahim Halil EKŞİ, 2018. "Credit growth and non-performing loans: evidence from Turkey and some Balkan countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 9, pages 229-249, December.
    2. Mensi, Walid & Hamdi, Atef & Shahzad, Syed Jawad Hussain & Shafiullah, Muhammad & Al-Yahyaee, Khamis Hamed, 2018. "Modeling cross-correlations and efficiency of Islamic and conventional banks from Saudi Arabia: Evidence from MF-DFA and MF-DXA approaches," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 502(C), pages 576-589.
    3. Cheikh A. Gueye & Asithandile Mbelu & Mr. Amadou N Sy, 2019. "Coping with Falling Oil Prices: The Different Fortunes of African Banks," IMF Working Papers 2019/129, International Monetary Fund.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Seven, Ünal & Yetkiner, Hakan, 2016. "Financial intermediation and economic growth: Does income matter?," Economic Systems, Elsevier, vol. 40(1), pages 39-58.
    2. Adolfo Barajas & Ralph Chami & Seyed Reza Yousefi, 2016. "The Finance and Growth Nexus Re-Examined: Do All Countries Benefit Equally?," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 1(5), pages 5-38, June.
    3. Danisman, Gamze Ozturk & Tarazi, Amine, 2024. "ESG activity and bank lending during financial crises," Journal of Financial Stability, Elsevier, vol. 70(C).
    4. Boukhatem, Jamel, 2016. "Assessing the direct effect of financial development on poverty reduction in a panel of low- and middle-income countries," Research in International Business and Finance, Elsevier, vol. 37(C), pages 214-230.
    5. Ridwan, Lanre Ibrahim & Ajide, Kazeem Bello & Cifuentes-Faura, Javier & Al-Faryan, Mamdouh Abdulaziz Saleh, 2024. "Shadow economy implications of financial development in Africa: Do income groups also matter?," Emerging Markets Review, Elsevier, vol. 59(C).
    6. Efobi, Uchenna & Asongu, Simplice & Okafor, Chinelo & Tchamyou, Vanessa & Tanankem, Belmondo, 2016. "Diaspora Remittance Inflow, Financial Development and the Industrialisation of Africa," MPRA Paper 76121, University Library of Munich, Germany.
    7. Smaoui, Houcem & Nechi, Salem, 2017. "Does sukuk market development spur economic growth?," Research in International Business and Finance, Elsevier, vol. 41(C), pages 136-147.
    8. Elya Nabila Abdul Bahri & Abu Hassan Shaari Md Nor & Tamat Sarmidi & Nor Hakimah Haji Mohd Nor, 2019. "The Role of Financial Development in the Relationship Between Foreign Direct Investment and Economic Growth: A Nonlinear Approach," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 22(02), pages 1-32, June.
    9. Jean-Pierre Allegret & Sana Azzabi, 2014. "Intégration financière internationale et croissance économique dans les pays émergents et en développement : le canal du développement financier," Revue d’économie du développement, De Boeck Université, vol. 22(3), pages 27-68.
    10. Paul-Olivier Klein & Rima Turk-Ariss, 2022. "Bank capital and economic activity," Post-Print hal-03955630, HAL.
    11. Sèna Kimm Gnangnon, 2020. "Comparative Advantage Following (CAF) development strategy, Aid for Trade flows and structural change in production," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-29, December.
    12. Efobi, Uchenna & Asongu, Simplice & Okafor, Chinelo & Tchamyou, Vanessa & Tanankem, Belmondo, 2019. "Remittances, finance and industrialisation in Africa," Journal of Multinational Financial Management, Elsevier, vol. 49(C), pages 54-66.
    13. You, Kefei & Solomon, Offiong Helen, 2015. "China's outward foreign direct investment and domestic investment: An industrial level analysis," China Economic Review, Elsevier, vol. 34(C), pages 249-260.
    14. Serhan Cevik & Mohammad H. Rahmati, 2020. "Searching for the finance–growth nexus in Libya," Empirical Economics, Springer, vol. 58(2), pages 567-581, February.
    15. Fufa, Tolina & Kim, Jaebeom, 2018. "Stock markets, banks, and economic growth: Evidence from more homogeneous panels," Research in International Business and Finance, Elsevier, vol. 44(C), pages 504-517.
    16. Ho, Sy-Hoa & Saadaoui, Jamel, 2022. "Bank credit and economic growth: A dynamic threshold panel model for ASEAN countries," International Economics, Elsevier, vol. 170(C), pages 115-128.
    17. Nasreen, Samia & Mahalik, Mantu Kumar & Shahbaz, Muhammad & Abbas, Qaisar, 2020. "How do financial globalization, institutions and economic growth impact financial sector development in European countries?," Research in International Business and Finance, Elsevier, vol. 54(C).
    18. Kunieda, Takuma & Okada, Keisuke & Shibata, Akihisa, 2011. "Corruption, Globalization, and Economic Growth: Theory and Evidence," MPRA Paper 35355, University Library of Munich, Germany.
    19. Ketteni, Elena & Kottaridi, Constantina, 2019. "Credit market deregulation and economic growth: Further insights using a marginal integration approach," Journal of Macroeconomics, Elsevier, vol. 62(C).
    20. Dabos, Marcelo & Williams, Tomas, 2009. "A reevaluation of the impact of financial development on economic growth and its sources by regions," MPRA Paper 27297, University Library of Munich, Germany.

    More about this item

    Keywords

    WP; private sector; government bond; Bank credit; macro-financial linkages; fixed-effects panel model; oil price; bank credit growth; bank balance; fed funds rate; oil price growth; Oil prices; Credit; Capital adequacy requirements; Excess liquidity; Global;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    Statistics

    Access and download statistics

    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:imf:imfwpa:2017/031. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    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.