The paper examines a wide range of issues relating to the mix between loans and grants as well as the degree of concessionality of loans. A number of empirical tests are carried out based on annual panel data over 1970 to 1999 for 22 donor countries and 72 recipient countries. Based on the tests, we are able to identify a number of economic and political factors that have influenced donors’ pas...

This paper examines the nature of competition in the Spanish banking industry during the years before and after Spain joined the European Monetary Union (EMU). The paper models competition in a product-differentiated market where banks choose from a list of price (interest rates of loans and deposits) and non-price variables (branches, advertising, IT capital). The empirically estimated demand ...

We investigate whether cultural differences between professional decision-makers affect financial contracts in a large dataset of international syndicated bank loans. We find that lead banks offer smaller loans at a higher interest rate to more culturally distant borrowers. Furthermore, lead banks are more likely to require third-party guarantees as cultural distance with the borrower increases...

This paper examines apparent misrepresentation among securitized non-agency loans using three indicators: unreported second liens, owner occupancy misreporting, and appraisal overstatements. We find that approximately 30% of loans exhibited some indication of potential misrepresentation. Misreporting is similar in both low and fulldocumentation loans and is associated with a 51% higher likeliho...

Using panel data, this paper tries to explain the amount of loans granted by the IBRD and it analyzes their effect on monetary and fiscal policies in the recipient countries. To check for political business cycles, the influence of elections on IBRD loans is examined. The results obtained support the hypothesis that net flows are higher prior to elections. With respect to moral hazard it is sho...

Microfinance loans have expanded greatly in the recent years as a way of helping the poor gain cheaper loans, but percentage take-up of microcredit has remained lower than expectations. In an attempt to explain this phenomenon, this paper uses a randomized evaluation of the impact of introducing microfinance loans in a new urban setting in Hyderabad, India, to determine if lack of flexibility i...

We examine whether stringent formal sector borrowing requirements in developing countries restrict credit access and the potential of asset-collateralized loans. When a Kenyan dairy cooperative exogenously replaced high down payments with loans collateralized by the asset itself a large water tank loan take-up increased from 2.4% to 41.9%. In contrast, substituting joint liability requirements ...