Credit Supply and Productivity Growth

76 Pages Posted: 14 Jun 2019

See all articles by Francesco Manaresi

Francesco Manaresi

Bank of Italy

Nicola Pierri

International Monetary Fund (IMF)

Multiple version iconThere are 3 versions of this paper

Date Written: May 2019


We study the impact of bank credit on firm productivity. We exploit a matched firm-bankdatabase covering all the credit relationships of Italian corporations, together with a naturalexperiment, to measure idiosyncratic supply-side shocks to credit availability and to estimatea production model augmented with financial frictions. We find that a contraction in creditsupply causes a reduction of firm TFP growth and also harms IT-adoption, innovation,exporting, and adoption of superior management practices, while a credit expansion haslimited impact. Quantitatively, the credit contraction between 2007 and 2009 accounts forabout a quarter of observed the decline in TFP.

Keywords: Total factor productivity, Credit risk, Credit, Credit demand, Credit expansion, Credit Supply, Productivity, Export, Management, IT adoption, interbank, TFP, intermediate input, productivity growth

JEL Classification: D22, D24, G21, E01, E52, D4, O4

Suggested Citation

Manaresi, Francesco and Pierri, Nicola, Credit Supply and Productivity Growth (May 2019). IMF Working Paper No. 19/107. Available at SSRN:

Francesco Manaresi (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184

Nicola Pierri

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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