Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/284298 
Year of Publication: 
2023
Series/Report no.: 
Working Paper No. 948
Publisher: 
Queen Mary University of London, School of Economics and Finance, London
Abstract: 
Using a unique dataset covering the universe of Portuguese firms and their credit situation we show that financially constrained firms are found across the entire firm size distribution, even in the top 1%. Incorporating a richer, empirically supported, productivity process into a standard heterogeneous firms model generates a joint distribution of size and credit constraints in line with the data. The presence of large constrained firms in the economy, together with their elevated capital share, explains about 66% of the response of output to a financial shock. We conclude by providing micro-evidence in support of the model mechanism.
Subjects: 
Firm size
business cycle
financial accelerator
JEL: 
E62
E22
E23
Document Type: 
Working Paper

Files in This Item:
File
Size
753.35 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.