Bank Lending in the Knowledge Economy

77 Pages Posted: 26 Jun 2020

See all articles by Giovanni Dell’Ariccia

Giovanni Dell’Ariccia

affiliation not provided to SSRN

Camelia Minoiu

Federal Reserve Board

Lev Ratnovski

International Monetary Fund; European Central Bank, Financial Research Division

Dalida Kadyrzhanova

Georgia State University

Date Written: June, 2020

Abstract

We study the composition of bank loan portfolios during the transition of the real sector to a knowledge economy where firms increasingly use intangible capital. Exploiting heterogeneity in bank exposure to the compositional shift from tangible to intangible capital, we show that exposed banks curtail commercial lending and reallocate lending to other assets, such as mortgages. We estimate that the substantial growth in intangible capital since the mid-1980s explains around 30% of the secular decline in the share of commercial lending in banks' loan portfolios. We provide suggestive evidence that this reallocation increased the riskiness of banks' mortgage lending.

Keywords: bank lending, commercial loans, corporate intangible capital, real estate loans

JEL Classification: E22, E44, G21

Suggested Citation

Dell’Ariccia, Giovanni and Minoiu, Camelia and Ratnovski, Lev and Kadyrzhanova, Dalida, Bank Lending in the Knowledge Economy (June, 2020). ECB Working Paper No. 20202429, Available at SSRN: https://ssrn.com/abstract=3636063

Giovanni Dell’Ariccia (Contact Author)

affiliation not provided to SSRN

No Address Available

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

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

European Central Bank, Financial Research Division

Germany

Dalida Kadyrzhanova

Georgia State University ( email )

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

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