Financing constraints and unemployment: Evidence from the Great Recession
By Burcu Duygan-Bump, Alexey Levkov, Judit Montoriol-Garriga. 2015
202 citations recorded by the source corpus.
This paper shows that financing constraints of small firms were one of the drivers of unemployment dynamics during the 2007–2009 recession in the United States. Specifically, workers in small firms were more likely to become unemployed during the 2007–2009 recession than comparable workers in large firms, but only if they were employed in industries with high financing needs. We find very similar results for the 1990–1991 recession, but not for the 2001 recession, where only the former was associated with a reduction in loan supply. The findings support the credit constraints hypothesis and underscore the role of bank lending in explaining labor market activity.
Subfields: Economics and Econometrics, Finance
View Paper: https://www.semanticscholar.org/paper/2f1d40c3f8abdbffe718993cc1c6ce172d02bc11
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Citations in the corpus
- Sovereign debt exposure and the bank lending channel: Impact on credit supply and the real economy (2020, background): “5In this area, we find particularly close to us those papers that examined the effect of the financial crisis, both in US (Benmelech et al. 2016; Chodorow-Reich 2014; Duygan-Bump et al. 2015; Greenstone et al. 2014) and Europe (Bentolila et al.”
- Firm Age, Investment Opportunities, and Job Creation (2016, unknown): “Employment creation in the other three categories of firms is much flatter across the distribution of Bartik (16)The work of Duygan-Bump et al. (2010), Fort et al.”
- Firm Entry and Employment Dynamics in the Great Recession (2014, unknown): “I use the sample period of 1980 to 1996, following Cetorelli and Strahan (2006) and Duygan-Bump et al. (2010).”