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on Corporate Finance |
| By: | Stijn Claessens; Kenichi Ueda; Yishay Yafeh |
| Abstract: | Financial frictions have been identified as key factors affecting economic fluctuations and growth. But, can institutional reforms reduce financial frictions? Based on a canonical investment model, we consider two potential channels: (i) financial transaction costs at the firm level; and (ii) required return at the country level. We empirically investigate the effects of institutions on these financial frictions using a panel of 75,000 firm-years across 48 countries for the period 1990 - 2007. We find that improved corporate governance (e.g., less informational problems) and enhanced contractual enforcement reduce financial frictions, while stronger creditor rights (e.g., lower collateral constraints) are less important. |
| Date: | 2010–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/231&r=cfn |
| By: | Deniz Igan; Burcu Aydin |
| Abstract: | The period following the 2000-01 crisis was marked by a successful disinflation program sustained through inflation targeting and fiscal discipline in Turkey. This paper studies the impact of monetary and fiscal policies on credit growth during this period. Using quarterly bank-level data covering 2002-08, we find evidence that liquidity-constrained banks have sharper decline in lending during contractionary monetary policies and that crowding-out effect disappears more for banks with a retail-banking focus when fiscal policies are prudent.The results are statistically weak, suggesting that bank lending channel is not strong in Turkey and government finances has limited direct impact on credit. |
| Date: | 2010–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/233&r=cfn |