Determinants of the Credit Growth in CESEE Countries

Roczniki Kolegium Analiz Ekonomicznych SGH (Collegium of Economic Analysis Annals), Issue 41, pages 161-174, 2016

14 Pages Posted: 16 Nov 2016

See all articles by Malgorzata Iwanicz-Drozdowska

Malgorzata Iwanicz-Drozdowska

Warsaw School of Economics, Institute of Finance

Bartosz Witkowski

Warsaw School of Economics (SGH)

Date Written: October 12, 2016

Abstract

Although the issue of determinants of the credit growth is not new in the literature, we re-examine this issue, taking into account some novel variables, such as the crisis dummy, the financial safety net (FSN) index and the ruling party dummies. In this study we analyse the credit growth in 20 countries from Central, Eastern and South-Eastern Europe (CESEE) with a special focus on the ownership structure of banks (state-owned, owned by international development banks, foreign-owned and domestic private-owned). We apply panel data regression to bank-level data, combined with country-specific data for the period from 1995 to 2014 (more than 3.500 observations). We find that banks owned by development banks are the least expansive, while state-owned banks are the most expansive in the growth of credit. Moreover, the credit growth was the highest when the ruling party is marked as ‘centrist’. The crisis does not have a negative impact on the credit growth, however, there have been not too many crisis events in CESEE countries.

Keywords: Banks, Credit Growth, Ownership Structure

JEL Classification: G21, G32

Suggested Citation

Iwanicz-Drozdowska, Malgorzata and Witkowski, Bartosz, Determinants of the Credit Growth in CESEE Countries (October 12, 2016). Roczniki Kolegium Analiz Ekonomicznych SGH (Collegium of Economic Analysis Annals), Issue 41, pages 161-174, 2016, Available at SSRN: https://ssrn.com/abstract=2868430

Malgorzata Iwanicz-Drozdowska (Contact Author)

Warsaw School of Economics, Institute of Finance ( email )

Warsaw
Poland

Bartosz Witkowski

Warsaw School of Economics (SGH) ( email )

aleja Niepodleglosci 162
PL-Warsaw, 02-554
Poland

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