Mobilization Effects of Multilateral Development Banks

This study uses loan-level data on syndicated lending to a large sample of developing countries between 1993 and 2017 to estimate the mobilization effects of multilateral development banks (MDBs), that is, their ability to crowd-in capital from private creditors. Controlling for a large set of fixed...

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Bibliographic Details
Published in:The World Bank economic review 2021-05, Vol.35 (2), p.521-543
Main Authors: Broccolini, Chiara, Lotti, Giulia, Maffioli, Alessandro, Presbitero, Andrea F, Stucchi, Rodolfo
Format: Article
Language:English
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Summary:This study uses loan-level data on syndicated lending to a large sample of developing countries between 1993 and 2017 to estimate the mobilization effects of multilateral development banks (MDBs), that is, their ability to crowd-in capital from private creditors. Controlling for a large set of fixed effects, the paper shows evidence of positive and significant mobilization effects of multilateral lending on the size of bank inflows. The number of lenders and the average maturity of syndicated loans also increase. These effects are present not only on impact but last for up to three years and are not offset by a decline in bond financing. There is no evidence of anticipation effects, and the results are robust to numerous tests controlling for the role of confounding factors and unobserved heterogeneity. Finally, the results are economically sizable, indicating that MDBs can mobilize about seven dollars in bank credit over a three-year period for each dollar invested.
ISSN:0258-6770
1564-698X
DOI:10.1093/wber/lhz049