Private Credit in 129 Countries

Simeon Djankov, Caralee McLiesh, Andrei Shleifer

NBER Working Paper No. 11078
Issued in January 2005, Revised in June 2006
NBER Program(s):Asset Pricing, Corporate Finance, Economic Fluctuations and Growth, Law and Economics, Public Economics

We investigate cross-country determinants of private credit, using new data on legal creditor rights and private and public credit registries in 129 countries. We find that both creditor protection through the legal system and information sharing institutions are associated with higher ratios of private credit to GDP, but that the former is relatively more important in the richer countries. An analysis of legal reforms also shows that improvements in creditor rights and in information sharing precede faster credit growth. We also find that creditor rights are extremely stable over time, contrary to the convergence hypothesis. Finally, we find that legal origins are an important determinant of both creditor rights and information sharing institutions.

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Document Object Identifier (DOI): 10.3386/w11078

Published: Djankov, Simeon & McLiesh, Caralee & Shleifer, Andrei, 2007. "Private credit in 129 countries," Journal of Financial Economics, Elsevier, vol. 84(2), pages 299-329, May. citation courtesy of

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