Out of sight, out of mind? Global value chains and credit allocation during a financial crisis

Raoul Minetti, Pierluigi Murro and Valentina Peruzzi

MPRA Paper from University Library of Munich, Germany

Abstract: We investigate the influence of firms' global status on the allocation of credit during a financial crisis. Using data on 15,000 businesses from seven European countries, we find that firms participating in global value chains were 25% less likely to be rationed by banks during the 2009 Great Recession. We next match information on the geography of firms' value chains with data on banks' branch and subsidiary networks. We find that banks especially insulated from credit rationing firms with supply chain relationships in the countries where banks have the largest presence. The results reveal that banks aimed at reducing spillovers on their lending and consulting activities with global chains rather than leveraging their knowledge of internationally traded products.

Keywords: Banks; global value chains; financial crises; spillovers. (search for similar items in EconPapers)
JEL-codes: D22 F10 G20 (search for similar items in EconPapers)
Date: 2025-04
New Economics Papers: this item is included in nep-eec and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:124369

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