Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229957
Authors: 
Eppinger, Peter S.
Neugebauer, Katja
Year of Publication: 
2021
Series/Report no.: 
University of Tübingen Working Papers in Business and Economics No. 141
Abstract: 
How do financial market conditions affect real economic performance? Empirical investigations of this question have often relied on measures of external financial dependence (EFD) that are constructed using U.S. data and applied to other countries under the assumption of a stable industry ranking across countries. This paper exploits unique, comparable survey data from seven European countries to show that correlations of EFD across countries are weak, casting some doubt on this assumption. We then use the novel survey-based EFD index to show that the global financial crisis had a disproportionately negative impact on the real performance of financially dependent firms. Further investigations highlight the importance of supply chains in propagating the credit shock.
Subjects: 
External financial dependence
financial constraints
financial crisis
firm performance
JEL: 
G10
G30
L25
F14
G01
D22
Document Type: 
Working Paper

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