Publication: World Bank Lending and Financial Sector Development
Date
2008-05-30
ISSN
1564-698X
Published
2008-05-30
Author(s)
Cull, Robert
Effron, Laurie
Abstract
A new database of World Bank loans to support financial sector development is used to investigate whether countries that received such loans experienced more rapid growth on standard indicators of financial development than countries that did not. Self-selection is accounted for with treatment-effects regressions. The results indicate that borrowing countries had significantly more rapid growth in M2/GDP than nonborrowers and swifter reductions in interest rate spreads and cash holdings (as a share of M2). Borrowers also had higher private credit growth rates than nonborrowers in some treatment-effects regressions but not in standard panel regressions with fixed country effects. On the whole, the results indicate some significant advantages in financial development for borrowers over nonborrowers.
Citation
“Cull, Robert; Effron, Laurie. 2008. World Bank Lending and Financial Sector Development. World Bank Economic Review. © World Bank. http://openknowledge.worldbank.org/entities/publication/d18a972e-534a-5096-8ef4-becae42d847f License: CC BY-NC-ND 3.0 IGO.”
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World Bank Economic Review
1564-698X
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