The causal effect of restrictive bank lending on employment growth: A matching approach

Michael Kleemann and Manuel Wiegand

MPRA Paper from University Library of Munich, Germany

Abstract: Does restrictive bank lending cause lower employment growth at the firm-level or does it reflect firm characteristics that drive the deterioration of employment figures? Applying propensity score matching, we estimate the treatment effect of restrictive bank lending on employment growth. Combining balance sheet information and survey data on a firm's current and expected future business situation, we rule out the impact of firm heterogeneity. We find that credit constraints have a significant negative effect on employment growth. Restricted firms also apply for short-time work more often, but this effect is small and not significant in all estimations.

Keywords: Credit financing; Employment; Financial crisis; Access to credit (search for similar items in EconPapers)
JEL-codes: G01 G21 G31 J23 J63 (search for similar items in EconPapers)
Date: 2013-01-02
New Economics Papers: this item is included in nep-ban
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Citations: View citations in EconPapers (1)

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