Do Credit Market Shocks Affect the Real Economy? Quasi-Experimental Evidence from the Great Recession and 'Normal' Economic Times

Greenstone, Michael; Mas, Alexandre; Nguyen, Hoai-Luu

doi:10.2139/ssrn.2187521

Cited by 15 publications

(18 citation statements)

References 43 publications

(11 reference statements)

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“…This data is matched to confidential data from the Bureau of Labor Statistics Longitudinal Database for a sample of just over 2,000 firms. In line with Greenstone and Mas (2012), he finds that relatively smaller firms that had pre-crisis relationships with less healthy banks faced stronger credit constraints after the fall of Lehman Brothers and reduced their employment more compared to clients of healthier banks. By contrast, for larger companies there are no significant effects.…”

Section: Literature Reviewmentioning

confidence: 73%

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When Credit Dries Up: Job Losses in the Great Recession

Bentolila

Jansen

Jiménez

et al. 2017

Journal of the European Economic Association

202

160

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We use a unique dataset to estimate the impact of a large credit supply shock on employment in Spain. We exploit marked differences in banks' health at the onset of the Great Recession. Several weak banks were rescued by the State and they reduced credit more than other banks. We compare employment changes from 2006 to 2010 at firms heavily indebted to weak banks before the crisis and the rest. Our estimates imply that these firms suffered an additional employment drop between 3 and 13.5 percentage points due to weak-bank attachment, representing between 8% and 36% of aggregate job losses. JEL-Code: D920, G330, J230. Terms of use: Documents in EconStor may

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Section: Literature Reviewmentioning

confidence: 73%

“…Greenstone and Mas (2012) one-third and one-half of job losses at small and medium-sized firms in the year following the Lehman Brothers bankruptcy. However, these estimates are not directly comparable with ours for a number of reasons.…”

Section: Discussionmentioning

confidence: 99%

When Credit Dries Up: Job Losses in the Great Recession

Bentolila

Jansen

Jiménez

et al. 2017

Journal of the European Economic Association

202

160

View full text Add to dashboard Cite

show abstract

“…Because we have information on the trade finance claims of U.S. banks by destination country that varies over time, we can estimate time-varying idiosyncratic bank-level supply shocks from the data. 22 In line with Greenstone and Mas (2012) and Amiti and Weinstein (2013), we estimate the following equation:…”

Section: Estimating Trade Finance Supply Shocksmentioning

confidence: 99%

“…Empirical evidence for the stickiness of firm-bank relationships is also provided in Chodorow-Reich (2014), Greenstone and Mas (2012) and Jimenez et al (2012), for example.…”

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confidence: 95%

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No Guarantees, No Trade: How Banks Affect Export Patterns

Niepmann

Schmidt‐Eisenlohr

2016

Int. finance discuss. pap.

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This study provides evidence that shocks to the supply of trade finance have a causal effect on U.S. exports. The identification strategy exploits variation in the importance of banks as providers of letters of credit across countries. The larger a U.S. bank's share of the trade finance market in a country, the larger should be the effect on exports to that country if the bank changes its supply of letters of credit. We find that a shock of one standard deviation to a country's supply of letters of credit increases export growth, on average, by 1.5 percentage points. The effect is larger for exports to small and poor destinations and more than doubles during times of financial distress. The results imply that banks affect firms' export behavior and suggest that trade finance played a role in the Great Trade Collapse.

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The Banks that Said No: the Impact of Credit Supply on Productivity and Wages

2019

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This paper estimates the effects of changes in bank credit supply on the real economy. We use UK firm-level data around the global financial crisis and information on pre-existing bank lending relationships to isolate exogenous credit supply shocks. We find some evidence that contractions in credit supply substantially reduce labour productivity, wages, and capital per worker within firms, and increase the chance firms will fail. Our results have implications for the welfare costs of financial crises, and for the costs of policy measures affecting credit supply at other times.

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Do Credit Market Shocks Affect the Real Economy? Quasi-Experimental Evidence from the Great Recession and 'Normal' Economic Times

Cited by 15 publications

References 43 publications

When Credit Dries Up: Job Losses in the Great Recession

When Credit Dries Up: Job Losses in the Great Recession

No Guarantees, No Trade: How Banks Affect Export Patterns

The Banks that Said No: the Impact of Credit Supply on Productivity and Wages

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