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Banking Deregulation, Local Credit Supply, and Small Business Growth

Banking Deregulation, Local Credit Supply, and Small Business Growth
Author: Prasad Krishnamurthy
Publisher:
Total Pages: 49
Release: 2014
Genre:
ISBN:

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I show that the deregulation of bank branching in the United States lowered the sensitivity of small business growth to local credit supply. In urban markets, within-state deregulation of branching resulted in an 80% decrease in the effect of local deposit growth on the growth of establishments with 20-99 employees. Across-state deregulation had an effect of comparable size in county markets. I fiijnd effects of similar magnitude using employment growth and payroll growth as measures of business growth. Using the history of litigation over the scope of state bank regulation, I show these results continue to hold for states that deregulated branching for reasons that were unrelated to economic conditions. These fiijndings suggest that bank deregulation played an important role in insuring small businesses against local shocks to credit supply.


Credit Supply and Productivity Growth

Credit Supply and Productivity Growth
Author: Francesco Manaresi
Publisher: International Monetary Fund
Total Pages: 75
Release: 2019-05-17
Genre: Business & Economics
ISBN: 1498315917

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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.


Internal Capital Markets in Business Groups and the Propagation of Credit Supply Shocks

Internal Capital Markets in Business Groups and the Propagation of Credit Supply Shocks
Author: Ms.Yu Shi
Publisher: International Monetary Fund
Total Pages: 39
Release: 2019-05-21
Genre: Business & Economics
ISBN: 1498316352

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Using business registry data from China, we show that internal capital markets in business groups can propagate corporate shareholders’ credit supply shocks to their subsidiaries. An average of 16.7% local bank credit growth where corporate shareholders are located would increase subsidiaries investment by 1% of their tangible fixed asset value, which accounts for 71% (7%) of the median (average) investment rate among these firms. We argue that equity exchanges is one channel through which corporate shareholders transmit bank credit supply shocks to the subsidiaries and provide empirical evidence to support the channel.


Banking Deregulation and Innovation

Banking Deregulation and Innovation
Author: Sudheer Chava
Publisher:
Total Pages: 28
Release: 2015
Genre:
ISBN:

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We document empirical support for a key micro-level channel -- innovation by young, private firms -- through which financial sector deregulation affects economic growth. We find that intrastate banking deregulation, which increased the local market power of banks, decreased the level and risk of innovation by young, private firms. In contrast, interstate banking deregulation, which decreased the local market power of banks, increased the level and risk of innovation by young, private firms. These contrasting effects on innovation also translated into contrasting effects on economic growth. Our study suggests that the nature of financial sector deregulation crucially affects its potential benefits to the real economy.


The Financial Crisis Inquiry Report

The Financial Crisis Inquiry Report
Author: Financial Crisis Inquiry Commission
Publisher: Cosimo, Inc.
Total Pages: 692
Release: 2011-05-01
Genre: Political Science
ISBN: 1616405414

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The Financial Crisis Inquiry Report, published by the U.S. Government and the Financial Crisis Inquiry Commission in early 2011, is the official government report on the United States financial collapse and the review of major financial institutions that bankrupted and failed, or would have without help from the government. The commission and the report were implemented after Congress passed an act in 2009 to review and prevent fraudulent activity. The report details, among other things, the periods before, during, and after the crisis, what led up to it, and analyses of subprime mortgage lending, credit expansion and banking policies, the collapse of companies like Fannie Mae and Freddie Mac, and the federal bailouts of Lehman and AIG. It also discusses the aftermath of the fallout and our current state. This report should be of interest to anyone concerned about the financial situation in the U.S. and around the world.THE FINANCIAL CRISIS INQUIRY COMMISSION is an independent, bi-partisan, government-appointed panel of 10 people that was created to "examine the causes, domestic and global, of the current financial and economic crisis in the United States." It was established as part of the Fraud Enforcement and Recovery Act of 2009. The commission consisted of private citizens with expertise in economics and finance, banking, housing, market regulation, and consumer protection. They examined and reported on "the collapse of major financial institutions that failed or would have failed if not for exceptional assistance from the government."News Dissector DANNY SCHECHTER is a journalist, blogger and filmmaker. He has been reporting on economic crises since the 1980's when he was with ABC News. His film In Debt We Trust warned of the economic meltdown in 2006. He has since written three books on the subject including Plunder: Investigating Our Economic Calamity (Cosimo Books, 2008), and The Crime Of Our Time: Why Wall Street Is Not Too Big to Jail (Disinfo Books, 2011), a companion to his latest film Plunder The Crime Of Our Time. He can be reached online at www.newsdissector.com.


Doing Business 2020

Doing Business 2020
Author: World Bank
Publisher: World Bank Publications
Total Pages: 241
Release: 2019-11-21
Genre: Business & Economics
ISBN: 1464814414

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Seventeen in a series of annual reports comparing business regulation in 190 economies, Doing Business 2020 measures aspects of regulation affecting 10 areas of everyday business activity.


Bank Lending in the Knowledge Economy

Bank Lending in the Knowledge Economy
Author: Mr.Giovanni Dell'Ariccia
Publisher: International Monetary Fund
Total Pages: 45
Release: 2017-11-07
Genre: Business & Economics
ISBN: 1484324897

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We study bank portfolio allocations during the transition of the real sector to a knowledge economy in which firms use less tangible capital and invest more in intangible assets. We show that, as firms shift toward intangible assets that have lower collateral values, banks reallocate their portfolios away from commercial loans toward other assets, primarily residential real estate loans and liquid assets. This effect is more pronounced for large and less well capitalized banks and is robust to controlling for real estate loan demand. Our results suggest that increased firm investment in intangible assets can explain up to 20% of bank portfolio reallocation from commercial to residential lending over the last four decades.


Spatial Econometrics

Spatial Econometrics
Author: J. Paul Elhorst
Publisher: Springer Science & Business Media
Total Pages: 125
Release: 2013-09-30
Genre: Business & Economics
ISBN: 3642403409

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This book provides an overview of three generations of spatial econometric models: models based on cross-sectional data, static models based on spatial panels and dynamic spatial panel data models. The book not only presents different model specifications and their corresponding estimators, but also critically discusses the purposes for which these models can be used and how their results should be interpreted.