Corporate investment and bank-dependent borrowers during the recent financial crisis

Philip Vermeulen and Andra Buca

No 1859, Working Paper Series from European Central Bank

Abstract: We use the recent financial crisis period to analyse the effect of bank credit tightening on real firm investment. We derive a new set of credit tightening indexes from the ECB Bank Lending Survey. Combining these with annual balance sheet data from Germany, France, Italy, Spain, Belgium and Portugal, we exploit the heterogeneity in the dependence on bank finance of different industries to identify real effects of credit tightening. We show that in response to tightening, investment falls substantially more in bank-dependent industries. JEL Classification: E22, E44, G01

Keywords: corporate investment; credit crunch; financial crisis (search for similar items in EconPapers)
Date: 2015-10
New Economics Papers: this item is included in nep-ban and nep-mac
Note: 327651
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Citations: View citations in EconPapers (12)

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Related works:
Journal Article: Corporate investment and bank-dependent borrowers during the recent financial crisis (2017)
Working Paper: Corporate investment and bank-dependent borrowers during the recent financial crisis (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20151859

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