Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212895 
Authors: 
Year of Publication: 
2018
Series/Report no.: 
BOFIT Discussion Papers No. 10/2018
Publisher: 
Bank of Finland, Institute for Economies in Transition (BOFIT), Helsinki
Abstract: 
This study examines the financial channel between oil price volatility and the resource curse using firm-level data. A collapse in oil prices adversely affects firm borrowing in resource-dependent countries. However, unlike in non-resource-dependent countries where just the resource sector is harmed, both resource and non-resource firms are affected in resource-dependent countries in an oil price collapse. We also find evidence of a flight to quality in lending, implying that the decline in leverage can partly be attributed to a reduction in the credit supply. Our results suggest that oil price volatility operates via the financial channel to impede economic diversification in resource-dependent countries.
JEL: 
Q32
O13
G32
Q02
G21
Persistent Identifier of the first edition: 
ISBN: 
978-952-323-225-9
Document Type: 
Working Paper

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