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Distressed banks, distorted decisions?

Gareth Anderson, Rebecca Riley and Garry Young ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Exploiting differences in pre-crisis business banking relationships, we present evidence to suggest that restricted credit availability following the 2008 financial crisis increased the rate of business failure in the United Kingdom. But rather than "cleansing the economy by accelerating the exit of the least productive businesses, we find that tighter credit conditions resulted in some businesses failing despite being more productive than their surviving competitors. We also find evidence that distressed banks protected highly leveraged, low productivity businesses from failure.

JEL-codes: D24 G21 G30 L10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-cfn and nep-fdg
Date: 2019-04-05
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http://eprints.lse.ac.uk/100947/ Open access version. (application/pdf)

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Working Paper: Distressed Banks, Distorted Decisions? (2019) Downloads
Working Paper: Distressed Banks, Distorted Decisions? (2019) Downloads
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