Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/309126 
Year of Publication: 
2024
Series/Report no.: 
Working Paper No. 2024-13
Publisher: 
Federal Reserve Bank of Atlanta, Atlanta, GA
Abstract: 
This paper studies the role of credit constraints in accounting for the dynamics of firm exit during the Great Recession. We present novel firm-level evidence on the role of credit constraints on exit behavior during the Great Recession. Firms in financial distress, with tighter access to credit, are more likely to default than firms with more access to credit. This difference widened substantially in the Great Recession while, in contrast, default rates did not vary much by size, age, or productivity. We identify conditions under which standard models of firms subject to financial frictions can be consistent with these facts.
Subjects: 
firm exit
Great Recession
credit constraints
financial distress
JEL: 
E32
G01
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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