Lines of Credit and Investment: Firm-Level Evidence of Real Effects of the Financial Crisis

Karolina Holmberg ()
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Karolina Holmberg: Monetary Policy Department, Central Bank of Sweden, Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden

No 281, Working Paper Series from Sveriges Riksbank (Central Bank of Sweden)

Abstract: Using Swedish bank lending data, investment data and accounting data, I examine how the financial crisis affected corporate investment through its effect on credit availability. Sensitivity to a credit supply shock is measured as credit reserves, defined as unused credit on lines of credit. I find that firms with low credit reserves reduced investment significantly more than other firms. However, it is not possible to determine that this relationship was caused by a shift in the supply of credit. Overall, I find no statistically strong evidence that the decline in investment was exacerbated by a contraction in credit supply.

Keywords: Corporate investment; Crisis; Financial Markets and the Macroeconomy; Lines of Credit (search for similar items in EconPapers)
JEL-codes: E22 E44 G01 G31 G32 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2013-11-01
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:rbnkwp:0281

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