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| Tekijä: | Chava, S. Purnanandam, A. |
| Otsikko: | The effect of banking crisis on bank-dependent borrowers |
| Lehti: | Journal of Financial Economics
2011 : JAN, VOL. 99:1, p. 116-135 |
| Asiasana: | financial markets banking crises loans credit Russia USA |
| Kieli: | eng |
| Tiivistelmä: | This paper provides causal evidence of adverse capital shocks to banks affecting negatively their borrowers' (here as: borwr/s) performance. An exogenous shock to the U.S. banking system during the Fall 1998 Russian crisis is used to separate the effect of borwr/s' credit demand from the supply of the bank credit. Firms primarily relying on banks for capital suffered larger valuation losses during this period, subsequently encountering a higher decline in their capital expenditure and profitability compared to firms with access to the public debt market etc. The paper's results suggest that the global integration of the financial sector can contribute to the financial shock propagation from one economy to another through the banking channel. |
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