Economics at your fingertips  

The Banks that Said No: the Impact of Credit Supply on Productivity and Wages

Jeremy Franklin (), May Rostom and Gregory Thwaites
Additional contact information
Jeremy Franklin: Bank of England

Journal of Financial Services Research, 2020, vol. 57, issue 2, No 2, 149-179

Abstract: Abstract This paper estimates the effects of changes in bank credit supply on the real economy. We use UK firm-level data around the global financial crisis and information on pre-existing bank lending relationships to isolate exogenous credit supply shocks. We find some evidence that contractions in credit supply substantially reduce labour productivity, wages, and capital per worker within firms, and increase the chance firms will fail. Our results have implications for the welfare costs of financial crises, and for the costs of policy measures affecting credit supply at other times.

Keywords: Firm behaviour; Productivity; Credit supply; Banks (search for similar items in EconPapers)
JEL-codes: D22 D24 G21 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link) Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: The banks that said no: the impact of credit supply on productivity and wages (2019) Downloads
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:

Ordering information: This journal article can be ordered from

DOI: 10.1007/s10693-019-00306-8

Access Statistics for this article

Journal of Financial Services Research is currently edited by Haluk Unal

More articles in Journal of Financial Services Research from Springer, Western Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

Page updated 2024-03-31
Handle: RePEc:kap:jfsres:v:57:y:2020:i:2:d:10.1007_s10693-019-00306-8