Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/49041
Authors: 
Kipar, Stefan
Year of Publication: 
Aug-2011
Series/Report no.: 
Ifo Working Paper 109
Abstract: 
Using unique micro-data on German firms, this paper estimates the effect of restrictive bank lending on innovation. In the German three-pillar banking system, comprised of commercial banks, credit unions, and savings banks, firms were differently affected in their ability to raise external debt during the financial crisis depending on the pillar to which their main relationship bank belonged. Using this institutional feature as an instrument for credit access reveals that restrictive bank lending increases a firm’s probability of discontinuing innovation projects by 21.6 percentage points.
Subjects: 
Financial crisis
innovation
credit constraints
instrumental variables
JEL: 
G01
G21
G30
O16
O30
Document Type: 
Working Paper

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