The effect of banking crisis on bank-dependent borrowers

• 成果类型: Article
• 署名作者: Chava, Sudheer; Purnanandam, Amiyatosh
• 署名单位: University of Michigan System; University of Michigan; University System of Georgia; Georgia Institute of Technology
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2010.08.006
• 发表日期: 2011
• 页码: 116-135
• 关键词: Banking crisis; Russian default; bank loans; Credit crunch

摘要

We provide causal evidence that adverse capital shocks to banks affect their borrowers' performance negatively. We use an exogenous shock to the U.S. banking system during the Russian crisis of Fall 1998 to separate the effect of borrowers' demand of credit from the supply of credit by the banks. Firms that primarily relied on banks for capital suffered larger valuation losses during this period and subsequently experienced a higher decline in their capital expenditure and profitability as compared to firms that had access to the public-debt market. Consistent with an adverse shock to the supply of credit, crisis-affected banks decreased the quantity of their lending and increased loan interest rates in the post-crisis period significantly more than the unaffected banks. Our results suggest that the global integration of the financial sector can contribute to the propagation of financial shocks from one economy to another through the banking channel. (C) 2010 Elsevier B.V. All rights reserved.