When Credit Dries Up: Job Losses in the Great Recession

Bentolila, Samuel; Jansen, Marcel; Jiménez, Gabriel; Ruano, Sonia

doi:10.2139/ssrn.2370773

Cited by 32 publications

(29 citation statements)

References 12 publications

(9 reference statements)

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“…We re-estimate the baseline specifications in Jiménez, Ongena, Peydró and Saurina (2012), Paravisini, Rappoport, Schnabel and Wolfenzon (2015) and Bentolila, Jansen and Jiménez (2018) separately for different loan types. 8 Jiménez et al (2012) uses Spanish data to assess how variation in bank capital interacts with changes in monetary policy rates to influence credit growth.…”

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Loan Types and the Bank Lending Channel

2020

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Loan Types and the Bank Lending Channel

2020

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“…Evidence at the industry level indicates that industries with more reliance on external credit suffer disproportionately during a period of financial crisis and are the slowest to subsequently recover (Abdul et al, 2011; Kroszner et al, 2007). Other studies (including Popov and Rocholl (2018), Giroud and Mueller (2017), Bentolila et al (2017), Berg (2018), Caggese et al (2018), Ersahin and Irani (2018), Benmelech et al (2019)) report evidence of contractions of the workforce in the face of credit crunches. Siemer (2019) estimates that, during the US 2007–2009 recession, financial constraints reduced employment growth by 4–8% in small firms when compared to large firms, and by 7–9% in young firms compared with their more established counterparts.…”

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confidence: 99%

International capital markets and domestic employment: Evidence from worldwide publicly listed large firms

Hou

Magnani

2021

World Economy

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We study how access to the international capital market affects domestic employment. Using a large firm‐level panel data set that covers over 60 countries between 1982 and 2014, we find that access to the international capital market positively affects firm‐level employment, and the magnitude of this impact is economically significant. This causal effect is identified through a generalised triple‐differences identification strategy that exploits variations in both external financial dependence and the progress of capital account openness. We also show that there are substantial heterogeneous effects across countries and firms; the effect is more pronounced for firms in industries that depend more on external finance and those in countries with weaker employment protection legislation. In addition, financially constrained firms respond more positively to international capital market access. Overall, our findings suggest that a strategy of gradually opening international capital markets will support employment.

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“…We first seek to understand the response of banks exposed to the EBA capital exercise to the supply of credit to firms. There is a strand of work that shows that bank shocks matter for loan supply (e.g., Bentolila et al, 2018;Jiménez et al, 2017;Khwaja & Mian, 2008). In the context of the EBA intervention, De Jonghe et al ( 2020), Fraisse et al (2020) and Blattner et al (2021) report a decline in corporate lending.…”

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confidence: 99%

International bank credit, nonbank lenders, and access to external financing

2022

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Using a cross-country firm-bank dataset, we examine how an unexpected increase in bank capital requirements by the European Banking Authority affects firms' financial choices. We find that the regulatory shock implies a reduction in the supply of bank credit, with US firms affected the most. Yet, US firms can tap into the public bond markets and secure credit lines from nonbank financial institutions. This has implications for their capital structure and their real outcomes. These results suggest that diversified domestic loan markets, in which banks and nonbank financial institutions lend to corporations, can help overcome reductions in cross-border bank funding.

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When Credit Dries Up: Job Losses in the Great Recession

Cited by 32 publications

References 12 publications

Loan Types and the Bank Lending Channel

Loan Types and the Bank Lending Channel

International capital markets and domestic employment: Evidence from worldwide publicly listed large firms

International bank credit, nonbank lenders, and access to external financing

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