On the Direct and Indirect Real Effects of Credit Supply Shocks
Laura Alfaro (),
Manuel Garcia-Santana () and
Enrique Moral-Benito ()
No 12794, CEPR Discussion Papers from C.E.P.R. Discussion Papers
We consider the real effects of bank lending shocks and how they permeate the economy through buyer-supplier linkages. We combine administrative data on all firms in Spain with a matched bank-firm-loan dataset on the universe of corporate loans for 2003-2013 to identify bank-specific shocks for each year using methods from the matched employer-employee literature. Combining firm-specific measures of upstream and downstream exposure, we construct firm-specific exogenous credit supply shocks and estimate their direct and indirect effects on real activity. Credit supply shocks have sizable direct and downstream propagation effects on investment and output throughout the period but no significant impact on employment during the expansion period. Downstream propagation effects are comparable or even larger in magnitude than direct effects. The results corroborate the importance of network effects in quantifying the real effects of credit shocks and show that real effects vary during booms and contractions.
Keywords: Bank-Lending Channel; employment; input-output linkages; investment; matched employer-employee; output (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at email@example.com
Working Paper: On the Direct and Indirect Real Effects of Credit Supply Shocks (2019)
Working Paper: On the direct and indirect real effects of credit supply shocks (2018)
Working Paper: On the Direct and Indirect Real Effects of Credit Supply Shocks (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:12794
Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=12794
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().