Credit supply and productivity growth by Francesco Manaresi and Nicola Pierri.
Material type: TextSeries: IMF working paper ; WP/19/107.Publisher: [Washington, D.C.] International Monetary Fund, [2019]Description: 1 online resource (76 pages)ISBN: 1498315984; 9781498315982Subject(s): Italy | Banks and banking -- Italy | Business enterprises -- Italy -- Finance | Corporations -- Italy -- Finance | Credit -- Italy | Banks and banking | Business enterprises -- Finance | Corporations -- Finance | CreditGenre/Form: EBSCO eBooks | Electronic books. DDC classification: 338.70945 LOC classification: HG4166 | .M36 2019Online resources: EBSCOhostData -- Theoretical framework -- Credit supply shocks and firm production -- The effect of credit supply on firm productivity growth -- The interbank market collapse as a natural experiment -- Beyond measurement: channels.
We study the impact of bank credit on firm productivity. We exploit a matched firm-bank database covering all the credit relationships of Italian corporations, together with a natural experiment, to measure idiosyncratic supply-side shocks to credit availability and to estimate a production model augmented with financial frictions. We find that a contraction in credit supply causes a reduction of firm TFP growth and also harms IT-adoption, innovation, exporting, and adoption of superior management practices, while a credit expansion has limited impact. Quantitatively, the credit contraction between 2007 and 2009 accounts for about a quarter of observed the decline in TFP.
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