Specialization in Bank Lending: Evidence from Exporting Firms

59 Pages Posted: 25 Jul 2017

See all articles by Daniel Paravisini

Daniel Paravisini

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)

Veronica Rappoport

London School of Economics & Political Science (LSE)

Multiple version iconThere are 2 versions of this paper

Date Written: July 2017

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 specialization affects a firm's choice of new lenders and how to finance exports, and that credit supply shocks disproportionately affect a firm's exports to markets where the lender specializes in. Thus, bank market-specific specialization makes credit difficult to substitute, with consequences for competition in credit markets and the transmission of credit shocks to the economy.

Keywords: Banking, Export Finance, specialization

Suggested Citation

Paravisini, Daniel and Schnabl, Philipp and Rappoport, Veronica, Specialization in Bank Lending: Evidence from Exporting Firms (July 2017). CEPR Discussion Paper No. DP12156. Available at SSRN: https://ssrn.com/abstract=3008337

Daniel Paravisini (Contact Author)

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

Veronica Rappoport

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

Houghton Street
London, WC2A 2AE
United Kingdom

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