Credit allocation and the financial crisis: evidence from Spanish companies
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Título
Credit allocation and the financial crisis: evidence from Spanish companiesFecha de publicación
2022-08-18Editor
SpringerISSN
1860-711X; 1860-7128Cita bibliográfica
Petrović, M., Teglio, A. & Alfarano, S. Credit allocation and the financial crisis: evidence from Spanish companies. J Econ Interact Coord 17, 1069–1114 (2022). https://doi.org/10.1007/s11403-022-00361-wTipo de documento
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Resumen
The worldwide financial crisis of 2007–2008 raised serious concerns about the soundness of banks’ activities and about the extent to which banking regulation should supervise banks’ investment decisions. We contribute ... [+]
The worldwide financial crisis of 2007–2008 raised serious concerns about the soundness of banks’ activities and about the extent to which banking regulation should supervise banks’ investment decisions. We contribute to this topic by examining the Spanish case, which has been emblematic of the bubble and burst dynamics in the credit market. In particular, we study the allocation of bank credit among Spanish companies from 1999 to 2014, showing that larger companies accumulated greater amounts of bank loans per unit of total assets, thus leading to a notable concentration. We also find that, during the Spanish boom period, bank loans shifted from the manufacturing to the construction industry, and in particular to the largest companies of the latter sector. This happened in spite of the high leverage of large construction firms, which was increasing also due to their growing debt. We argue that the higher operating benefits, reflecting the increase of the housing price during the boom period, overvalued construction firms as potential borrowers. The bankruptcy of several large construction companies during the Spanish crisis supports the need for monitoring and regulation, to avoid an excessive concentration of bank credit to a few large companies, especially if they belong to a specific sector. [-]
Publicado en
Journal of Economic Interaction and Coordination (2022) 17:1069–1114Entidad financiadora
EU STREP
Código del proyecto o subvención
FP7-ICT-2013- 10 | Grant Agreement 611875 | FP7-SSH-2013-2 | Grant Agreement 612955
Título del proyecto o subvención
SYMPHONY | FinMaP
Derechos de acceso
© The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature 2022
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info:eu-repo/semantics/openAccess
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