EconPapers    
Economics at your fingertips  
 

Shocks Abroad, Pain at Home? Bank-firm Level Evidence on the International Transmission of Financial Shocks

Steven Ongena (), Jose-Luis Peydro () and Neeltje Van Horen ()

No 2013-040, Discussion Paper from Tilburg University, Center for Economic Research

Abstract: Abstract: We study the international transmission of shocks from the banking to the real sector during the global financial crisis. For identification, we use matched bank-firm level data, including many small and medium-sized firms, in Eastern Europe and Central Asia. We find that internationally-borrowing domestic and foreign-owned banks contract their credit more during the crisis than domestic banks that are funded only locally. Firms that are dependent on credit and at the same time have a relationship with an internationally-borrowing domestic or a foreign bank (as compared to a locally-funded domestic bank) suffer more in their financing and real performance. Single-bank-relationship firms, small firms and firms with intangible assets suffer most. For credit-independent firms, there are no differential effects. Our findings suggest that financial globalization has intensified the international transmission of financial shocks with substantial real consequences.

Keywords: international transmission; firm real effects; foreign banks; international wholesale funding; credit shock (search for similar items in EconPapers)
JEL-codes: G01 G21 F23 F36 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-ifn and nep-tra
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (23) Track citations by RSS feed

Downloads: (external link)
https://pure.uvt.nl/ws/portalfiles/portal/1526323/2013-040.pdf (application/pdf)

Related works:
Working Paper: Shocks Abroad, Pain at Home? Bank-Firm Level Evidence on the International Transmission of Financial Shocks (2013) 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: https://EconPapers.repec.org/RePEc:tiu:tiucen:74a6ead6-0e8d-4843-91c0-0f1be3f257b3

Access Statistics for this paper

More papers in Discussion Paper from Tilburg University, Center for Economic Research
Bibliographic data for series maintained by Richard Broekman ().

 
Page updated 2018-11-10
Handle: RePEc:tiu:tiucen:74a6ead6-0e8d-4843-91c0-0f1be3f257b3