External financing constraints and firm's innovative activities during the financial crisis
Marek Giebel () and
Kornelius Kraft ()
No 17-064, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research
We investigate the effect of individual banks' liquidity shocks during the recent financial crisis of 2008/2009 on the innovation activities of their business customers. Individual banks' liquidity shocks are identified by the degree of interbank market usage. We use a difference-in-differences approach to identify the effect of interbank reliance during the crisis on total innovation expenditures in comparison to the periods before. Our results imply that those firms which have a business relation to a bank with higher interbank market reliance reduce their innovation activities during the financial crisis to a higher degree than other firms.
Keywords: financial crisis; financial constraints of banks; financing of innovation; innovation activity (search for similar items in EconPapers)
JEL-codes: G01 G21 G30 O16 O30 O31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-ino and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:17064
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