Foreign currency borrowing by small firms in emerging markets

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dc.contributor.author Mora, Nada
dc.contributor.author Neaime, Simon
dc.contributor.author Aintablian, Sebouh
dc.date.accessioned 2016-05-10T11:10:53Z
dc.date.available 2016-05-10T11:10:53Z
dc.date.copyright 2013 en_US
dc.date.issued 2016-05-10
dc.identifier.issn 0378-4266 en_US
dc.identifier.uri http://hdl.handle.net/10725/3751 en_US
dc.description.abstract This paper investigates what induces small firms in an emerging market economy to borrow dollar credit from domestic banks. Our data are from a unique survey of firms in Lebanon. The findings complement studies of large firms with foreign currency loans from foreign lenders. Exporters, naturally hedged against currency risk, are more likely to incur dollar debt. Firms also partly hedge themselves by passing currency risk to customers and suppliers. Less opaque firms with easily verifiable collateral and higher net worth are more likely to access dollar credit. Firms reliant on formal financing (banks and supplier credit) are more likely to contract dollar debt than firms reliant on informal financing (family, friends and moneylenders). Bank relationships, however, do not increase the dollar debt likelihood. And finally, profitable firms are less likely to have dollar debt. Information frictions and limited collateral, therefore, constrain dollar credit even when it is intermediated domestically. en_US
dc.language.iso en en_US
dc.title Foreign currency borrowing by small firms in emerging markets en_US
dc.type Article en_US
dc.description.version Published en_US
dc.title.subtitle When domestic banks intermediate dollars en_US
dc.author.school SOB en_US
dc.author.idnumber 200603708 en_US
dc.author.department Department of Finance and Accounting (FINA) en_US
dc.description.embargo N/A en_US
dc.relation.journal Journal of Banking & Finance en_US
dc.journal.volume 37 en_US
dc.journal.issue 3 en_US
dc.article.pages 1093-1107 en_US
dc.keywords Dollarization en_US
dc.keywords Foreign currency borrowing en_US
dc.keywords Dollar debt en_US
dc.keywords Currency mismatch en_US
dc.identifier.doi http://dx.doi.org/10.1016/j.jbankfin.2012.11.012 en_US
dc.identifier.ctation Mora, N., Neaime, S., & Aintablian, S. (2013). Foreign currency borrowing by small firms in emerging markets: When domestic banks intermediate dollars. Journal of Banking & Finance, 37(3), 1093-1107. en_US
dc.author.email sebouh.aintablian@lau.edu.lb en_US
dc.identifier.tou http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php en_US
dc.identifier.url http://www.sciencedirect.com/science/article/pii/S0378426612003597 en_US

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