Liquidity Risk and Long-Term Finance: Evidence from a Natural Experiment

• 成果类型: Article
• 署名作者: Choudhary, M. Ali; Limodio, Nicola
• 署名单位: Bocconi University; Bocconi University
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdab065
• 发表日期: 2022
• 页码: 1278-1313
• 关键词: shocks evidence; BANK; intermediation; constraints; GROWTH; firm

摘要

Banks in low-income countries face severe liquidity risk due to volatile deposits, which destabilize their funding, and dysfunctional liquidity markets, which induce expensive interbank and central bank lending. Such liquidity risk dissuades the transformation of short-term deposits into long-term loans and deters long-term investment. To validate this mechanism, we exploit a Sharia-compliant levy in Pakistan, which generates unintended and quasi-experimental variation in liquidity risk, with data from the credit registry and firm imports. We find that banks with a stronger exposure to liquidity risk lower their supply of long-term finance, which reduces the long-term investment of connected firms.