Credit Misallocation During the European Financial Crisis
By Fabiano Schivardi, Enrico Sette, Guido Tabellini. Economic Journal, 2017
291 citations recorded by the source corpus.
Using data on bank-firm relationships in Italy during the Eurozone financial crisis, we show that: (i) compared to healthy banks, under-capitalised banks cut credit to healthy but not to zombie firms and are more likely to prolong a credit relationship with a zombie; (ii) in area sectors with more low-capital banks, zombies are more likely to survive; (iii) bank under-capitalisation does not hurt the growth rate of healthy firms. We provide evidence that extending credit to the weakest firms during the recession mitigated the disruption of supply chains and adverse local demand externalities.
Subfields: Economics and Econometrics, Finance
View Paper: https://www.semanticscholar.org/paper/e55ed17ad2b1e1cedec49051b3b55cb18a9e9628
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Economics and Econometrics
In Finance
Citations in the corpus
- Breaking the Shackles: Zombie Firms, Weak Banks and Depressed Restructuring in Europe (2017, unknown): “14 Second, by adding sectoral bank health we address one criticism for the reallocation regression by Schivardi et al. (2018). They argue that an aggregate shock - which increases the zombie share in a sector - may also affect the relative performance of firms, even in the absence of zombie congesti”
- The Rise of Zombie Firms: Causes and Consequences (2018, background): “Formal evidence suggests that weak banks indeed played a role in the wake of the GFC (Storz et al (2017), Schivardi et al (2017)).”
- Productivity growth in Italy: a tale of a slow-motion change (2018, unknown): “Schivardi et al. (2017) tackle the misallocation issue during the crisis from a restricted but very specific and policy-relevant perspective.”