2023/08/21 by FRANCESCO MANARESI, Francesco Manaresi, NICOLA PIERRI +1
Economics, Econometrics and Finance · Business, Management and Accounting · #Banking stability, regulation, efficiency #Italy: Economic History and Contemporary Issues #Corporate Finance and Governance
paper · pdf · doi:10.1111/jmcb.13092
Abstract 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, to measure idiosyncratic supply‐side shocks to credit availability and estimate a production model augmented with financial frictions. We find the effect of credit supply to be asymmetric: contractions harm TFP growth, halting productivity‐enhancing activities; positive credit supply shocks have limited effects. This points toward a role of financial stability in preserving productivity growth.