Corporate Resilience to Banking Crises: The Roles of Trust and Trade Credit / Ross Levine, Chen Lin, Wensi Xie.

Format:

Book

Author/Creator:

Levine, Ross.

Contributor:

National Bureau of Economic Research.

Lin, Chen.

Xie, Wensi.

Series:

Working Paper Series (National Bureau of Economic Research) no. w22153.

NBER working paper series no. w22153

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Corporate Resilience to Banking Crises

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2016.

Summary:

Are firms more resilient to systemic banking crises in economies with higher levels of social trust? Using firm-level data in 34 countries from 1990 through 2011, we find that liquidity-dependent firms in high-trust countries obtain more trade credit and suffer smaller drops in profits and employment during banking crises than similar firms in low-trust economies. The results are consistent with the view that when banking crises block the normal banking-lending channel, greater social trust facilitates access to informal finance, cushioning the effects of these crises on corporate profits and employment.

Notes:

Print version record

April 2016.