The Real Effects of Credit Supply: Review, Synthesis, and Future Directions

47 Pages Posted: 15 Oct 2019 Last revised: 6 Dec 2019

See all articles by Ozan Guler

Ozan Guler

Ghent University - Faculty of Economics and Business Administration

Mike Mariathasan

KU Leuven- Faculty of Economics & Business

Klaas Mulier

Ghent University - Faculty of Economics and Business Administration

Nejat Gokhan Okatan

KU Leuven - Faculty of Economics & Business

Date Written: October 1, 2019

Abstract

This paper reviews the rapidly growing literature on the real effects of bank credit supply fluctuations and identifies several worthwhile avenues for future research. In terms of the transmission of credit supply shocks into real effects, we suggest to further investigate the roles of (i) private borrower information, (ii) employment protection legislation, (iii) corporate governance, (iv) bank specialization, and (v) alternative financing sources. We also call for additional analyses of how these shocks affect (vi) investment efficiency, (vii) market structure, (viii) the allocation of human capital, as well as (ix) how their effects can be propagated through the production network. Finally, we emphasize the need for more evidence on (x) the persistency, (xi) asymmetry, and (xii) heterogeneity of resulting outcomes.

Keywords: Credit Supply, Bank Health, Real Effects

JEL Classification: E22, E24, E50, G21

Suggested Citation

Guler, Ozan and Mariathasan, Mike and Mulier, Klaas and Okatan, Nejat Gokhan, The Real Effects of Credit Supply: Review, Synthesis, and Future Directions (October 1, 2019). Available at SSRN: https://ssrn.com/abstract=3463018 or http://dx.doi.org/10.2139/ssrn.3463018

Ozan Guler (Contact Author)

Ghent University - Faculty of Economics and Business Administration ( email )

Ghent, B-9000
Belgium

Mike Mariathasan

KU Leuven- Faculty of Economics & Business ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Klaas Mulier

Ghent University - Faculty of Economics and Business Administration ( email )

Ghent, B-9000
Belgium

Nejat Gokhan Okatan

KU Leuven - Faculty of Economics & Business ( email )

Naamsestraat 69
Leuven, B-3000
Belgium
0486454752 (Phone)

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