Table 3.

Baseline regression – bank lending behaviour and strategic interaction.

Dependent variable: the natural logarithm of gross loan (Δln loans)	Model 1	Model 2	Model 3	Model 4	Model 5	Model 6
L.Δln loans	0.471∗∗∗	0.477∗∗∗	0.578∗∗∗	0.520∗∗∗	0.529∗∗∗	0.465∗∗∗
	(0.049)	(0.062)	(0.061)	(0.066)	(0.050)	(0.066)
GDP growth (${\mathbf{G}\mathbf{D}\mathbf{P}}_{\mathbf{t}}$)	0.959∗∗∗	0.888∗∗∗	1.708∗∗∗	1.162∗∗∗	1.288∗∗∗	0.829∗∗∗
	(0.110)	(0.122)	(0.205)	(0.172)	(0.173)	(0.157)
Δ lending rate	-0.405∗∗∗		-0.543∗∗∗		-0.483∗∗∗
	(0.046)		(0.059)		(0.058)
Δ Deposit rate		-0.422∗∗∗		-0.481∗∗∗		-0.408∗∗∗
		(0.058)		(0.063)		(0.062)
${\mathbf{G}\mathbf{D}\mathbf{P}}_{\mathbf{t}}\times {\mathbf{D}\mathbf{c}\mathbf{s}\mathbf{m}}_{\mathbf{i},\mathbf{t}}$	-0.609∗∗∗	-0.688∗∗∗	-0.814∗∗∗	-0.747∗∗∗	-0.704∗∗∗	-0.686∗∗∗
	(0.134)	(0.112)	(0.181)	(0.123)	(0.145)	(0.114)
$\Delta {\mathbf{i}\left(\mathbf{l}\mathbf{e}\mathbf{n}\mathbf{d}\mathbf{i}\mathbf{n}\mathbf{g}\mathbf{r}\mathbf{a}\mathbf{t}\mathbf{e}\right)}_{\mathbf{t}}{\times \mathbf{D}\mathbf{c}\mathbf{s}\mathbf{m}}_{\mathbf{i},\mathbf{t}}$	0.433∗∗∗		0.560∗∗∗		0.486∗∗∗
	(0.081)		(0.109)		(0.084)
$\Delta {\mathbf{i}\left(\mathbf{d}\mathbf{e}\mathbf{p}\mathbf{o}\mathbf{s}\mathbf{i}\mathbf{t}\mathbf{r}\mathbf{a}\mathbf{t}\mathbf{e}\right)}_{\mathbf{t}}{\times \mathbf{D}\mathbf{c}\mathbf{s}\mathbf{m}}_{\mathbf{i},\mathbf{t}}$		0.646∗∗∗		0.694∗∗∗		0.643∗∗∗
		(0.087)		(0.096)		(0.088)
Inflation	-0.117∗∗∗	-0.200∗∗∗	-0.103∗∗∗	-0.198∗∗∗	-0.109∗∗∗	-0.203∗∗∗
	(0.027)	(0.024)	(0.036)	(0.026)	(0.037)	(0.026)
L.capital	0.027	0.041	0.084∗∗	0.064	-0.034	0.049
	(0.026)	(0.030)	(0.039)	(0.040)	(0.033)	(0.032)
L.Loan Loss Provisions	-0.17	-0.104	-0.148	-0.1	0.019	-0.183
	(0.139)	(0.142)	(0.164)	(0.157)	(0.149)	(0.236)
Δln deposits	-0.007∗∗	-0.009∗∗	-0.010∗∗	-0.010∗∗	-0.011∗∗∗	-0.008∗
	(0.003)	(0.004)	(0.004)	(0.004)	(0.003)	(0.004)
L.lnassets	-0.414∗∗∗	-0.351∗∗∗	-0.315∗∗	-0.305∗∗∗	-0.584∗∗∗	-0.309∗∗∗
	(0.052)	(0.054)	(0.120)	(0.092)	(0.115)	(0.101)
L.crsin (efficiency score)			-7.378∗∗∗	-2.841
			(2.394)	(2.021)
L.aLerner (market power)					0.337	-0.132
					(0.579)	(0.297)
Year fixed effects	Yes	Yes	Yes	Yes	Yes	Yes
Observations	260	260	260	260	260	260
Number of instruments	25	25	25	25	25	25
Hansen test of over-identification p-value	0.149	0.180	0.133	0.149	0.137	0.138
Arellano-Bond test for AR(1)	0.000	0.000	0.000	0.000	0.000	0.000
Arellano-Bond test for AR(2)	0.148	0.265	0.214	0.305	0.181	0.267

Note: Models 1–6: lending behaviour = Δlnloans; Models 1,3,5: policy interest rate = Lending rate; Models 2,4,6: policy interest rate = Deposit rate. Standard errors in parentheses.

∗p < 0.10, ∗∗p < 0.05, ∗∗∗p < 0.01.