PhD Candidate, Department of Economics, LSE
Contact information
Email: n.limodio1@lse.ac.uk
Phone number: +44 (0)74 1299 0801
Room number: 32L.3.01
Address: Department of Economics || London School of Economics and Political Science || Houghton Street || London WC2A 2AE
Research interests
Primary Fields: Development Economics
Secondary Fields: Finance || Organisational Economics
Job Market Paper
Deposit Volatility, Liquidity and Long-Term Investment: Evidence from a Natural Experiment in Pakistan
Abstract
Deposit volatility lowers loan maturities in the presence of costly bank liquidity, which in turn reduces long-term investment and output. We formalise this mechanism in a banking model and analyse exogenous variation in deposit volatility induced by a Sharia levy in Pakistan. Data from the universe of corporate loans and a firm-level survey show that deposit volatility and liquidity cost: 1) reduce loan maturities and lending rates; 2) leave loan amounts and total investment unchanged; 3) redirect investment from fixed assets towards working capital. A targeted liquidity program is quantified to generate yearly output gains between 0.042% and 0.205%.
Publications and Additional Papers
“Manager Assignment and Project Returns: Evidence from the World Bank”
“The Development Impact of Financial Regulation: Evidence from Ethiopia” (with F. Strobbe, World Bank)
“Media, Demonstrations, and Public Good Delivery: Evidence from World Bank Projects during Natural Disasters”
“Financial Regulation and Government Revenue: The Effects of a Policy Change in Ethiopia” (with F. Strobbe, World Bank)