Product Innovation and Credit Market Disruptions

97 Pages Posted: 5 Nov 2019 Last revised: 9 Sep 2022

See all articles by Joao Granja

Joao Granja

University of Chicago - Booth School of Business

Sara Moreira

Northwestern University

Date Written: March 22, 2022


We provide new evidence that disruptions in firms’ access to credit during the Global Financial
Crisis had significant effects on product innovation in the consumer-goods sector. We combine
highly-granular retail-scan data with lending data and we find that credit-constrained firms
introduced fewer new products, those products were less novel, and the new products sold less
well. Overall, these findings suggest that disruptions to credit markets impair firms’ ability to
compete for profits through new-product offerings.

Keywords: Innovation; Multi-Product Firms; Financial Constraints; Great Recession

JEL Classification: G11, G21, G31, G32, L15, L25, O31, O32

Suggested Citation

Granja, Joao and Moreira, Sara, Product Innovation and Credit Market Disruptions (March 22, 2022). Available at SSRN: or

Joao Granja (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 South Woodlawn Avenue
Room 326
Chicago, IL 60637
United States

Sara Moreira

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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