Bank Lending in the Knowledge Economy

Author/Editor:

Giovanni Dell'Ariccia ; Dalida Kadyrzhanova ; Camelia Minoiu ; Lev Ratnovski

Publication Date:

November 7, 2017

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

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.

Series:

Working Paper No. 17/234

Subject:

English

Publication Date:

November 7, 2017

ISBN/ISSN:

9781484324899/1018-5941

Stock No:

WPIEA2017234

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

45

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