Browsing by Author "Afonso, Ana Sofia Aguiar"
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- Do financial derivatives have an impact on bank lending? : evidence from European Union commercial banks from 2013 to 2017Publication . Afonso, Ana Sofia Aguiar; Romeiro, Paulo Alexandre Mendes RamosThe present Dissertation’s academic research question addresses the impact of the use of derivatives on bank lending activity for European Union commercial banks between yearly periods from 2013 to 2017. In order to address the latter research question, this document’s empirical research strategy employs panel data estimation, using a strongly balanced panel dataset. The banking data is extracted from ORBIS® BankFocus and the sample is composed by one hundred and fifteen banks. Once the baseline findings are obtained, further three robustness checks are also performed, namely for: i) different bank sizes; ii) different geographical locations; iii) different political contexts. The overall findings reflect that the use of derivatives has a negative impact on bank lending activity. In addition, bank characteristics present both negative and positive impacts on bank lending activity, depending on the variable, while supply and demand factors present a consistent negative impact on bank lending activity. These results are globally stable and innovative when compared to previous academic research not only regarding the impact of the use of derivatives, but also due to the impact of other variables previously studied, which, in the context of this Dissertation, exhibit differing impacts. Regarding the future of derivatives markets after Brexit, the results suggest that the findings of the present Dissertation will only be slightly larger in this context. Finally, there is no evidence that increasing the use of derivatives will increase economic growth, while the increase in bank lending has a significantly positive impact on the economy.