Determinants of Bank Long-Term Lending Behavior: Evidence from Russia

24 Pages Posted: 25 Jun 2015

See all articles by Lucy Chernykh

Lucy Chernykh

Clemson University

Alexandra K. Theodossiou

Texas A&M University-Corpus Christi-College of Business

Date Written: June 25, 2015

Abstract

We investigate the determinants of the banks' propensity to make long-term business loans in an emerging market context. Using a large sample of Russian banks, we find that the median bank allocates only 0.5% of its assets in long-term business loans and that there is wide cross-sectional variation in this ratio among banks. A bank's ability to extend long-term business loans depends on its size, capitalization, and the availability of long-term liabilities rather than its type of ownership. These results highlight the importance of bank-level (supply side) constraints in extending vital long-term credit to firms.

Keywords: emerging market banking; long-term business loans; Russia

JEL Classification: G21, O16

Suggested Citation

Chernykh, Lucy and Theodossiou, Alexandra K., Determinants of Bank Long-Term Lending Behavior: Evidence from Russia (June 25, 2015). Multinational Finance Journal, Vol. 15, No. 3/4, p. 193-216, 2011, Available at SSRN: https://ssrn.com/abstract=2622922

Lucy Chernykh (Contact Author)

Clemson University ( email )

School of Accountancy and Finance
Clemson, SC 29634
United States

Alexandra K. Theodossiou

Texas A&M University-Corpus Christi-College of Business ( email )

6300 Ocean Drive
Corpus Christi, TX 78412
United States

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