Specialization in Bank Lending: Evidence from Exporting Firms

60 Pages Posted: 14 Dec 2015

See all articles by Daniel Paravisini

Daniel Paravisini

London School of Economics & Political Science (LSE)

Veronica Rappoport

London School of Economics & Political Science (LSE)

Philipp Schnabl

New York University (NYU) - Department of Finance; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

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Date Written: December 2015

Abstract

We develop an empirical approach for identifying specialization in bank lending using granular data on borrower activities. We illustrate the approach by characterizing bank specialization by export market, combining bank, loan, and export data for all firms in Peru. We find that all banks specialize in at least one export market, that firms take the pattern of bank specialization into account when selecting their lending banks, and that credit supply shocks disproportionately affect a firm’s exports to markets where the lender specializes in. Thus, bank specialization makes credit difficult to substitute, which has consequences for competition in credit markets and the transmission of credit shocks to the real economy.

Suggested Citation

Paravisini, Daniel and Rappoport, Veronica and Schnabl, Philipp, Specialization in Bank Lending: Evidence from Exporting Firms (December 2015). NBER Working Paper No. w21800, Available at SSRN: https://ssrn.com/abstract=2703205

Daniel Paravisini (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Veronica Rappoport

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Philipp Schnabl

New York University (NYU) - Department of Finance ( email )

Stern School of Business
44 West 4th Street
New York, NY 10012-1126
United States

HOME PAGE: http://pages.stern.nyu.edu/~sternfin/pschnabl/

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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