Supply Chain Network and Credit Supply

Kensuke Fukunaga and Daisuke Miyakawa
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Kensuke Fukunaga: Economist, Institute for Monetary and Economic Studies, Bank of Japan (currently, Senior Analyst, UTokyo Economic Consulting Inc., E-mail: kensuke_fukunaga@utecon.net)
Daisuke Miyakawa: Associate Professor, Hitotsubashi University Business School (E-mail: dmiyakawa@hub.hit-u.ac.jp)

No 22-E-08, IMES Discussion Paper Series from Institute for Monetary and Economic Studies, Bank of Japan

Abstract: How do supply chain networks affect credit supply? To answer this question, we empirically detect clusters of firms by using firm-to- firm transaction data, then measure banks' exposures to those clusters and borrowing firms by using bank-to-firm lending data. Through the panel estimations controlling for unobservable factors potentially affecting credit demand and supply, first, we find that the higher portfolio concentration of banks on the clusters of firms lowers credit supply to less creditworthy firms. Second, we also find that such a pattern is more apparent for banks lending to creditworthy firms. These results suggest that the change in real network propagates to credit supply through banks' risk management.

Keywords: Credit supply; supply chain network; cluster detection (search for similar items in EconPapers)
JEL-codes: D22 E44 G11 G21 (search for similar items in EconPapers)
Date: 2022-05
New Economics Papers: this item is included in nep-ban, nep-com, nep-fdg, nep-mac and nep-net
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