Trade shocks, credit reallocation and the role of specialisation : evidence from syndicated lending / Isabella Müller
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Trade shocks, credit reallocation and the role of specialisation
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1727471083
URN
urn:nbn:de:gbv:3:2-124569
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Publication history
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, [19. August 2020]
Content
1 Online-Ressource (III, 33 Seiten, 2,49 MB) : Diagramm
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eng
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Abstract
This paper provides evidence that banks cut lending to US borrowers as a consequence of a trade shock. This adverse reaction is stronger for banks with higher ex-ante lending to US industries hit by the trade shock. Importantly, I document large heterogeneity in banks‘ reaction depending on their sectoral specialisation. Banks shield industries in which they are specialised in and at the same time reduce the availability of credit to industries they are not specialised in. The latter is driven by low-capital banks and lending to firms that are themselves hit by the trade shock. Banks‘ adjustments have adverse real effects.
Series
IWH-Diskussionspapiere ; 2020, No. 15 (August 2020) ppn:837399270