Banks, Firms, and Jobs

By Fabio Berton, Sauro Mocetti, Andrea F Presbitero, Matteo Richiardi

February 14, 2017

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Fabio Berton, Sauro Mocetti, Andrea F Presbitero, and Matteo Richiardi. Banks, Firms, and Jobs, (USA: International Monetary Fund, 2017) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We analyze the employment effects of financial shocks using a rich data set of job contracts, matched with the universe of firms and their lending banks in one Italian region. To isolate the effect of the financial shock we construct a firm-specific time-varying measure of credit supply. The contraction in credit supply explains one fourth of the reduction in employment. This result is concentrated in more levered and less productive firms. Also, the relatively less educated and less skilled workers with temporary contracts are the most affected. Our results are consistent with the cleansing role of financial shocks.

Subject: Bank credit, Banking, Credit, Employment, Financial institutions, Labor, Labor force, Loans, Money

Keywords: Asia and Pacific, Bank credit, Bank lending channel, Cleansing effect, Credit, Credit crunch, Credit supply index, Dependent variable, Employment, Employment agency, Employment decision, Financing constraint, Financing constraints, Firm cluster, Firm FE, Firm level, Global, Job contracts, Labor force, Loans, Quarter FE, Service sector, WP

Publication Details

Pages:

57
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2017/038
Stock No:

WPIEA2017038
ISBN:

9781475579017
ISSN:

1018-5941

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