Prior empirical research indicates that loan growth in the banking industry is positively related to cash flow. I offer an alternative methodology that is better able to capture the effect of cash flow on loan growth while controlling for the potentially coincident effect of loan growth on cash...

We use simultaneous equation estimation techniques to analyze decisions made by 35 US banks with respect to credit extended domestically and to credit extended within 16 foreign countries, 1988-1994. Our results indicate that foreign credit extension by US banks follows the commercial expansion...