Bank Liquidity Provision Across the Firm Size Distribution

Gabriel Chodorow-Reich, Olivier Darmouni, Stephan Luck and Matthew Plosser

No 27945, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use supervisory loan-level data to document that small firms (SMEs) obtain shorter maturity credit lines than large firms; have less active maturity management; post more collateral; have higher utilization rates; and pay higher spreads. We rationalize these facts as the equilibrium outcome of a trade-off between lender commitment and discretion. Using the COVID recession, we test the prediction that SMEs are subject to greater lender discretion by examining credit line utilization. We show that SMEs do not drawdown in contrast to large firms despite SME demand, but that PPP loans helped alleviate the shortfall.

JEL-codes: E51 G21 G32 (search for similar items in EconPapers)
Date: 2020-10
New Economics Papers: this item is included in nep-ban, nep-ent, nep-fdg, nep-mac and nep-sbm
Note: CF EFG ME
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Citations: View citations in EconPapers (34)

Published as Gabriel Chodorow-Reich & Olivier Darmouni & Stephan Luck & Matthew Plosser, 2021. "Bank liquidity provision across the firm size distribution," Journal of Financial Economics, .

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Journal Article: Bank liquidity provision across the firm size distribution (2022)
Working Paper: Bank Liquidity Provision across the Firm Size Distribution (2020)
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