Long-run competitive spillovers of the credit crunch / William McShane ; editor: Halle Institute for Economic Research (IWH) - Member of the Leibniz Association
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Discovery
1845622588
URN
urn:nbn:de:gbv:3:2-965725
DOI
ISBN
ISSN
Autorin / Autor
Beiträger
Körperschaft
Erschienen
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, May 2023
Umfang
1 Online-Ressource (53 Seiten, 1,48 MB) : Diagramme
Ausgabevermerk
Sprache
eng
Anmerkungen
Literaturverzeichnis: Seite 31-34
Inhaltliche Zusammenfassung
Competition in the U.S. appears to have declined. One contributing factor may have been heterogeneity in the availability of credit during the financial crisis. I examine the impact of product market peer credit constraints on long-run competitive outcomes and behavior among non-financial firms. I use measures of lender exposure to the financial crisis to create a plausibly exogenous instrument for product market credit availability. I find that credit constraints of product market peers positively predict growth in sales, market share, profitability, and markups. This is consistent with the notion that firms gained at the expense of their credit constrained peers. The relationship is robust to accounting for other sources of inter-firm spillovers, namely credit access of technology network and supply chain peers. Further, I find evidence of strategic investment, i.e. the idea that firms increase investment in response to peer credit constraints to commit to deter entry mobility. This behavior may explain why temporary heterogeneity in the availability of credit appears to have resulted in a persistent redistribution of output across firms.
Schriftenreihe
IWH-Diskussionspapiere ; 2023, no. 10 (May 2023) ppn:837399270