German Bank Lending to Industrial and Non-Industrial Countries: Driven by Fundamentals or Different Treatment
56 Pages Posted: 31 Aug 2005
Date Written: August 2005
Abstract
This paper shows that the substantial disparity in German bank lending towards industrial and non-industrial (Non-IC) countries is largely explained by differences in countries' endowments and only to a minor extent by German banks' different treatment of these country groups. This is demonstrated by applying a decomposition technique to an augmented gravity model that is estimated for German foreign lending using a new micro panel data-set individual claims from the Deutsche Bundesbank covering the period from 1996 to 2002.
Keywords: German bank lending, gravity models, Oaxaca decomposition analysis
JEL Classification: F30, F34, G21
Suggested Citation: Suggested Citation