Dollars Dollars Everywhere, nor Any Dime to Lend : Credit Limit Constraints on Financial Sector Absorptive Capacity

We exploit an unexpected inflow of liquidity in an emerging market to study how capital is intermediated to firms. We find that backward-looking credit limit constraints imposed by banks make it difficult for firms to borrow, despite readily available bank liquidity, healthy aggregate demand, and a...

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Main Authors:	Khwaja, Asim Ijaz, Mian, Atif, Zia, Bilal
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Capital Investment Capacity E220 Financial Markets and the Macroeconomy E440 Banks Other Depository Institutions Micro Finance Institutions Mortgages G210 Economic Development: Financial Markets Saving and Capital Investment Corporate Finance and Governance O160 International Linkages to Development Role of International Organizations O190
Online Access:	http://hdl.handle.net/10986/4630

id	okr-10986-4630
recordtype	oai_dc
spelling	okr-10986-46302021-04-23T14:02:18Z Dollars Dollars Everywhere, nor Any Dime to Lend : Credit Limit Constraints on Financial Sector Absorptive Capacity Khwaja, Asim Ijaz Mian, Atif Zia, Bilal Capital Investment Capacity E220 Financial Markets and the Macroeconomy E440 Banks Other Depository Institutions Micro Finance Institutions Mortgages G210 Economic Development: Financial Markets Saving and Capital Investment Corporate Finance and Governance O160 International Linkages to Development Role of International Organizations O190 We exploit an unexpected inflow of liquidity in an emerging market to study how capital is intermediated to firms. We find that backward-looking credit limit constraints imposed by banks make it difficult for firms to borrow, despite readily available bank liquidity, healthy aggregate demand, and a sharply falling cost of capital. The resulting aggregate failure to extend and retain capital in the economy suggests that agency costs that force banks to rely on sticky balance-sheet-based credit limits prevent emerging economies from effectively intermediating capital. 2012-03-30T07:28:55Z 2012-03-30T07:28:55Z 2010 Journal Article Review of Financial Studies 08939454 http://hdl.handle.net/10986/4630 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Capital Investment Capacity E220 Financial Markets and the Macroeconomy E440 Banks Other Depository Institutions Micro Finance Institutions Mortgages G210 Economic Development: Financial Markets Saving and Capital Investment Corporate Finance and Governance O160 International Linkages to Development Role of International Organizations O190
spellingShingle	Capital Investment Capacity E220 Financial Markets and the Macroeconomy E440 Banks Other Depository Institutions Micro Finance Institutions Mortgages G210 Economic Development: Financial Markets Saving and Capital Investment Corporate Finance and Governance O160 International Linkages to Development Role of International Organizations O190 Khwaja, Asim Ijaz Mian, Atif Zia, Bilal Dollars Dollars Everywhere, nor Any Dime to Lend : Credit Limit Constraints on Financial Sector Absorptive Capacity
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	We exploit an unexpected inflow of liquidity in an emerging market to study how capital is intermediated to firms. We find that backward-looking credit limit constraints imposed by banks make it difficult for firms to borrow, despite readily available bank liquidity, healthy aggregate demand, and a sharply falling cost of capital. The resulting aggregate failure to extend and retain capital in the economy suggests that agency costs that force banks to rely on sticky balance-sheet-based credit limits prevent emerging economies from effectively intermediating capital.
format	Journal Article
author	Khwaja, Asim Ijaz Mian, Atif Zia, Bilal
author_facet	Khwaja, Asim Ijaz Mian, Atif Zia, Bilal
author_sort	Khwaja, Asim Ijaz
title	Dollars Dollars Everywhere, nor Any Dime to Lend : Credit Limit Constraints on Financial Sector Absorptive Capacity
title_short	Dollars Dollars Everywhere, nor Any Dime to Lend : Credit Limit Constraints on Financial Sector Absorptive Capacity
title_full	Dollars Dollars Everywhere, nor Any Dime to Lend : Credit Limit Constraints on Financial Sector Absorptive Capacity
title_fullStr	Dollars Dollars Everywhere, nor Any Dime to Lend : Credit Limit Constraints on Financial Sector Absorptive Capacity
title_full_unstemmed	Dollars Dollars Everywhere, nor Any Dime to Lend : Credit Limit Constraints on Financial Sector Absorptive Capacity
title_sort	dollars dollars everywhere, nor any dime to lend : credit limit constraints on financial sector absorptive capacity
publishDate	2012
url	http://hdl.handle.net/10986/4630
_version_	1764392181126135808

Dollars Dollars Everywhere, nor Any Dime to Lend : Credit Limit Constraints on Financial Sector Absorptive Capacity

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