FIRM SIZE AND BUSINESS CYCLES WITH CREDIT SHOCKS

• 成果类型: Article
• 署名作者: Jo, In Hwan
• 署名单位: National University of Singapore
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12741
• 发表日期: 2025
• 页码: 629-659
• 关键词: Financial constraints; PRODUCTIVITY; DYNAMICS; Heterogeneity; GROWTH; LABOR; reallocation; frictions; selection; channel

摘要

I study the macroeconomic implications of firm heterogeneity in the presence of financial frictions. I build a business cycle model in which firm size is jointly determined by idiosyncratic productivity and collateral constraints. I estimate skewed idiosyncratic shocks and align the model with the evidence on firm size, leverage, and investment moments. The extent of resource misallocation is driven by a small number of highly productive but financially constrained firms. A credit shock severely affects such firms, further constraining their ability to borrow. This generates a large and persistent economic downturn that is comparable to the Great Recession.