Corporate investment and bank-dependent borrowers during the recent financial crisis
Buca, Andra ; Vermeulen, Philip
ECB - Frankfurt am Main
2015
52 p.
bank ; credit ; economic recession ; enterprise level ; investment
Belgium ; France ; Germany ; Italy ; Portugal ; Spain
Working Paper
1859
Financing and monetary policy
English
Bibliogr.
"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."
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