Bank Lending in the Knowledge Economy

46 Pages Posted: 1 Dec 2017

See all articles by Giovanni Dell'Ariccia

Giovanni Dell'Ariccia

International Monetary Fund (IMF) - Research Department; Centre for Economic Policy Research (CEPR)

Dalida Kadyrzhanova

Georgia State University

Camelia Minoiu

Federal Reserve Board

Lev Ratnovski

International Monetary Fund

Multiple version iconThere are 3 versions of this paper

Date Written: November 2017

Abstract

We study bank portfolio allocations during the transition of the real sector to a knowledge economy in which firms use less tangible capital and invest more in intangible assets. We show that, as firms shift toward intangible assets that have lower collateral values, banks reallocate their portfolios away from commercial loans toward other assets, primarily residential real estate loans and liquid assets. This effect is more pronounced for large and less well capitalized banks and is robust to controlling for real estate loan demand. Our results suggest that increased firm investment in intangible assets can explain up to 20%of bank portfolio reallocation from commercial to residential lending over the last four decades.

Keywords: Intangible capital, bank lending, commercial loans, real estate loans, liquid assets, Financial Markets and the Macroeconomy, Government Policy and Regulation

JEL Classification: E22, E44, G21, G28

Suggested Citation

Dell'Ariccia, Giovanni and Kadyrzhanova, Dalida and Minoiu, Camelia and Ratnovski, Lev, Bank Lending in the Knowledge Economy (November 2017). IMF Working Paper No. 17/234. Available at SSRN: https://ssrn.com/abstract=3079563

Giovanni Dell'Ariccia (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-8135 (Phone)
202-623-4352 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Dalida Kadyrzhanova

Georgia State University ( email )

J Mack Robinson College of Business
35 Broad St, 12th Floor
Atlanta, GA 30303-3083
United States

Camelia Minoiu

Federal Reserve Board ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Lev Ratnovski

International Monetary Fund ( email )

700 19th Street, N.W.
Washington, DC 20431
United States
+1 202 623 8213 (Phone)

HOME PAGE: http://ratnovski.googlepages.com

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