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Bank Lending Behavior; an Emphasis on Macroeconomic Variables and Competitive Strategy
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Nima Shahini1   , Nader Mehregan *2 , Mohamad Ghaffarifard3 |
1- Department of Economics, SR.C., Islamic Azad University, Tehran, Iran
2- Department of Economics, Bu-Ali Sina University, Hamadan, Iran , mehregannader@basu.ac.ir
3- Department of Economics, Ahlul-bayt International University Tehran, Iran |
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Abstract: (1 Views) |
The objective of this study is to analyze the effect of macroeconomic factors and monetary policy variables on the lending behavior of Iranian banks, with an emphasis on the role of competitive strategy. To this end, data from 15 banks in the Iranian banking network over the period 1396 to 1403 were analyzed using the panel GMM framework. The study utilizes macroeconomic variables, including economic growth and inflation, bank-specific factors such as deposit interest rates, bank size, credit risk, deposit growth, and the adjusted Lerner Index to investigate their respective effects on bank lending. The results indicate a positive and significant relationship between economic growth, deposit growth, and bank size with lending growth, while inflation, deposit interest rates, and credit risk exert a negative impact. Furthermore, model estimations reveal that the Lerner Index plays a decisive role in moderating monetary shocks; specifically, while market power reduces banks' sensitivity to contractionary monetary policies, the negative coefficient of the interaction term between economic growth and the Lerner Index suggests that monopolistic banks adopt a more conservative stance during economic booms, experiencing lower lending growth compared to competitive banks.
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| Keywords: Competitive Strategy, bank lending behavior, macroeconomic factors, panel GMM model |
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Full-Text [PDF 818 kb]
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Article type: Research |
Subject:
Special
Received: 2026/03/21 | Accepted: 2026/05/15 | Published: 2026/08/23
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