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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Shocks abroad, pain at home? Bank-firm level evidence on financial contagion during the recent financial crisis |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | IMF Economic Review |
| Publisher | Palgrave Macmillan Ltd. |
| Geographical Reach | international |
| ISSN | 2041-4161 |
| Volume | 63 |
| Number | 4 |
| Page Range | 698 - 750 |
| Date | 2016 |
| Abstract Text | We study the international transmission of shocks from the banking to the real sector during the global financial crisis. For identification, we use matched bank-firm level data, including many small and medium-sized firms, in Eastern Europe and Central Asia. We find that internationally-borrowing domestic and foreign-owned banks contract their credit more during the crisis than domestic banks that are funded only locally. Firms that are dependent on credit and at the same time have a relationship with an internationally-borrowing domestic or a foreign bank (as compared to a locally-funded domestic bank) suffer more in their financing and real performance. Single-bank-relationship firms, small firms and firms with intangible assets suffer most. For credit-independent firms, there are no differential effects. Our findings suggest that financial globalization has intensified the international transmission of financial shocks with substantial real consequences. |
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| Digital Object Identifier | 10.1057/imfer.2015.34 |
| Other Identification Number | merlin-id:12392 |
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