Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/156142
Authors: 
Bremus, Franziska
Neugebauer, Katja
Year of Publication: 
2017
Series/Report no.: 
DIW Discussion Papers 1650
Abstract: 
This paper investigates how the withdrawal of banks from their cross-border business impacted the borrowing costs of European firms since the crisis. We combine aggregate information on total and cross-border credit with firm-level survey data for the period 2010 - 2014. We find that the decline in cross-border lending led to a deterioration in the borrowing conditions of small firms. In countries with more pronounced reductions in cross-border credit inflows, the likelihood of a rise in firms' external financing costs has increased. This result is mainly driven by the interbank channel, which plays a crucial role in transmitting shocks to the real sector across borders.
Subjects: 
international banking
firm finance
credit constraints
JEL: 
F34
F36
G15
G21
Document Type: 
Working Paper

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