Do Bank Shocks Affect Firm Activities? A Survey

This paper presents an overview of the extant literature on the real impacts of financial constraints, with a particular focus on those originating from adverse shocks on bank lending. While numerous studies have been conducted to establish the causal linkage between negative fund supply shocks and various from activities, empirical studies that successfully identify loan supply shocks are, in our view, still in the development stage. The first part of this paper reviews the large body of literature on this topic and details how recent studies have attempted to overcome an important identification challenge: disentangling fund supply and demand shocks. After discussing various approaches ranging from natural experiments to the employment of extensive panel datasets, we introduce two studies from our own research, which employ a natural disaster in Japan as a natural experiment to study the real impact of financial constraints on the capital investment and export behaviors of firms.

Institute of Economic Research, Hitotsubashi University

2013-11

English(eng)

technical report

VoR

26

基盤研究(S) = Grants-in-Aid for Scientific Research (S)

Working Paper Series / Real Estate Markets, Financial Crisis, and Economic Growth An Integrated Economic Approach

https://hdl.handle.net/10086/25999