pletely offset by a reduction in other debt flows, finding no evidence that corporate bond financing declines after an MDB starts lending in a given country-sector pair.<sup>5</sup> Fourth, the MDB mobilization effects estimated at the sector level (within a country) could be (partially) offset if the presence of MDBs in a given sector crowds-out private bank lending to other sectors. We show that this is not the case and our results hold even when aggregating the data at the country-year level. Finally, we find differences in the mobilization effects across countries. In particular, some of these effects are weaker in low-income countries, suggesting that MDBs still face challenges with mobilizing resources in weak macroeconomic contexts.<sup>6</sup> The existing literature on mobilization effects is mostly focused on IMF lending, but its catalytic effect—the capacity to attract private investment after the provision of official assistance (Giannini and Cottarelli, 2002; Morris and Shin, 2006)—cannot be easily generalized to MDBs, given its nature of crisis lending.<sup>7</sup> A smaller strand of literature has explicitly focused on MDBs and, using aggregate macroeconomic data, finds mixed results. Rodrik (1995) tests whether net transfers from multilateral sources to a country are a predictor of subsequent net private capital inflows, controlling for past private flows. Using country data averaged over four periods of six years (from 1970 to 1993), he does not find a significant association between past multilateral lending and current private flows. With a similar framework, Dasgupta and Ratha (2000) and Ratha (2001) instead find evidence suggesting that private capital flows to a large sample of developing countries respond positively to multilateral lending.

Our contribution to this strand of literature is twofold. First, we depart from the literature on catalytic finance that has mainly discussed the catalytic role of the IMF by focusing specifically on the role of MDBs, which have been greatly overlooked to date and can instead be an important player in light of the 2030 Development Agenda. Second, while the literature has mainly focused on case studies or country-aggregate data, our analysis is based on loan-level data from the international market of syndicated loans and covers a large sample of more than 100 countries over 25

> 5We focus on the potential substitution between corporate bonds and syndicated loans, as they constitute two similar sources of financing from a firm’s perspective (Altunbas ̧ et al., 2010), while the role of the equity market in developing countries is still relatively limited (World Bank, 2015; Cortina et al., 2018). We also look at potential displacement effects on aid and other development finance flows, finding no evidence that MDB mobilization effects crowd-out these flows. 6The last set of results is discussed in Appendix A.

> 7Theoretically, Corsetti et al. (2006) and Morris and Shin (2006) show that IMF catalytic financing can reduce the incidence of panic-driven liquidity crises. Empirically, Eichengreen and Mody (2001), Mody and Saravia (2006) and Eichengreen et al. (2006) use transaction data of individual bond issuances and find the IMF programs can have a catalytic effect, conditional on country fundamentals being only moderately bad. In a review of economics and politics of the IMF, Bird (2007) warns against any generalization from the empirical evidence, as results do not appear robust and consistent across methodologies, samples and economic conditions. More recently, Erce and Riera-Crichton (2015) use aggregate data on gross capital flows to show that while the IMF does not appear able to catalyze foreign capital, there is substantial evidence that it does affect the behavior of resident investors, who are less likely to place their savings abroad and more likely to repatriate their foreign assets.

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