Specialization in Bank Lending: Evidence from Exporting Firms

By Daniel Paravisini, Veronica Rappoport, Philipp Schnabl. Social Science Research Network, 2015

163 citations recorded by the source corpus.

We develop an empirical approach for identifying specialization in bank lending using granular data on borrower activities. We illustrate the approach by characterizing bank specialization by export market, combining bank, loan, and export data for all firms in Peru. We find that all banks specialize in at least one export market, that specialization affects a firm's choice of new lenders and how to finance exports, and that credit supply shocks disproportionately affect a firm's exports to markets where the lender specializes in. Thus, bank market-specific specialization makes credit difficult to substitute, with consequences for competition in credit markets and the transmission of credit shocks to the economy.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/18eed7f212d70e33bd4dbf143039534e88e828ec

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Citations in the corpus

Some Borrowers Are More Equal than Others: Bank Funding Shocks and Credit Reallocation* (2019, background): “While many researchers have analyzed the role that geographical specialization plays for credit reallocation after a funding shock, only few have focused on the impact of other types of lending specialization (Paravisini et al., 2017; DeYoung et al., 2015; Liberti and Sturgess, 2016).”