Economics at your fingertips  

Exports and bank shocks: Evidence from matched firm-bank data

Mariana Spatareanu, Vlad Manole and Ali Kabiri

Structural Change and Economic Dynamics, 2018, vol. 47, issue C, 46-56

Abstract: A growing literature aims to understand the structural change and cyclical factors that contributed to the Great Trade Collapse. This paper adds to the conversation by investigating the impact of bank distress on firms’ exports using matched firm-bank data for the UK. We use two novel measures of bank distress: the Basel III net stable funding ratio, as well as the market-based bank credit default swap spreads, which best capture bank default risk, especially during crises. Our detailed database provides the crucial firm-bank relationship information that allows us to directly test for the banking channel effect on the real economy, and to carefully account for various endogeneities and biases in estimation. We also test for the possible contagion of the Sovereign Debt Crisis from the GIIPS economies to the UK. We find that the severe bank distress generated by the recent crises immediately, negatively and significantly affects UK firms’ exports, independent of demand shocks. Not all firms were impacted equally: private firms and firms in industries more dependent on external finance were impacted the most, while publicly owned firms were less affected by their bank’s distress.

Keywords: Exports; Bank distress; Crisis; UK (search for similar items in EconPapers)
JEL-codes: E44 E32 G21 F40 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Structural Change and Economic Dynamics is currently edited by F. Duchin, H. Hagemann, M. Landesmann, R. Scazzieri, A. Steenge and B. Verspagen

More articles in Structural Change and Economic Dynamics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-01-19
Handle: RePEc:eee:streco:v:47:y:2018:i:c:p:46-56