Capital Misallocation During the Great Recession

Nola, Alessandro Di

doi:10.2139/ssrn.3033789

Cited by 5 publications

(4 citation statements)

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“…A growing literature studies the impact of misallocation of resources on GDP and TFP growth after financial crises, and generally finds large negative effects (Barnett et al, 2014;Di Nola, 2015). Gopinath et al (2015) document a significant increase in productivity losses from capital misallocation in Southern European countries, most notably Spain.…”

Section: Related Literaturementioning

confidence: 99%

Credit Misallocation During the European Financial Crisis

Schivardi

Sette

Tabellini

2021

The Economic Journal

119

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Using data on bank-firm relationships in Italy during the Eurozone financial crisis, we show that: (i) compared to healthy banks, under-capitalized banks cut credit to healthy but not to zombie firms and are more likely to prolong a credit relationship with a zombie; (ii) in areas-sectors with more low-capital banks, zombies are more likely to survive; (iii) nevertheless, bank under-capitalization does not hurt the growth rate of healthy firms. We provide evidence that extending credit to the weakest firms during the recession mitigated the disruption of supply chains and adverse local demand externalities.

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Section: Related Literaturementioning

confidence: 99%

Credit Misallocation During the European Financial Crisis

Schivardi

Sette

Tabellini

2021

The Economic Journal

119

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“…In addition, those US regions with less regulatory forbearance during the GFC experienced more reallocation and stronger productivity growth after the crisis (Gropp et al, 2017). Ultimately there is evidence of a large increase in factor misallocation during the GFC (Di Nola, 2017). As for Italy, banks with less capital lent more to rms with higher leverage and lower return on assets during the crisis (Schivardi et al, 2017).…”

Section: Extensive Marginmentioning

confidence: 99%