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KDI 경제교육·정보센터

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최신자료
Violent Conflict and Cross-Border Lending
CEPR
2024.12.10
How do violent conflicts affect cross-border lending? Using data on syndicated loans by over 14,000 creditors to firms in 179 countries between 1989-2020, we find that when violent conflict erupts in a country, foreign banks reduce overall lending relative to domestic banks but increase their lending to military firms. This effect is observed for both state and privately-owned banks, and is relatively stronger for banks with higher exposures to the conflict country and for those domiciled in high-income countries, relatively more so in the Americas and in east Asia than in the global "West". The relative increase in military lending by foreign banks neither spills over to neighboring countries nor persists after conflicts end. Our findings highlight the increasingly complex interplay between geopolitics and global finance.