Credit Supply and Productivity Growth

Author/Editor:

Francesco Manaresi ; Nicola Pierri

Publication Date:

May 17, 2019

Electronic Access:

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Summary:

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.

Series:

Working Paper No. 19/107

Subject:

English

Publication Date:

May 17, 2019

ISBN/ISSN:

9781498315258/1018-5941

Stock No:

WPIEA2019107

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

75

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