548 research outputs found
Banks in Space: Does Distance Really Affect Cross-Border Banking?
During the last years, gravity equations have leapt from the trade literature over into the literature on financial markets. Martin and Rey (2004) were the first to provide a theoretical model for cross-border asset trade, yielding a structural gravity equation that could be tested empirically. In this paper, I use a gravity model to evaluate factors that affect cross-border banking. Furthermore, I extend the baseline model to allow for third-country effects, which have been shown to matter for international trade, using spatial econometric techniques. I try to answer the following question: First, is there a spatial dimension in cross-border banking? Second, if so, has it changed over time, and third, what happens if this spatial dimension is ignored? I use bilateral data on cross-border banking assets for 15 countries, and I estimate cross-section regressions for each year. I find strong evidence for a spatial dimension in cross-border banking. Furthermore, the direct effect of distance decreases significantly when applying spatial econometric techniques.
Shocks at large banks and banking sector distress: the Banking Granular Residual
Size matters in banking. In this paper, we explore whether shocks originating at large banks affect the probability of distress of smaller banks and thus the stability of the banking system. Our analysis proceeds in two steps. In a first step, we follow Gabaix (2008a) and construct a measure of idiosyncratic shocks at large banks, the so-called Banking Granular Residual. This measure documents the importance of size effects for the German banking system. In a second step, we incorporate this measure of idiosyncratic shocks at large banks into an integrated stress-testing model for the German banking system following De Graeve et al. (2007). We find that positive shocks at large banks reduce the probability of distress of small banks. --Banking sector distress,size effects,shock propagation,Granular Residual
Reduced cross-border lending and financing costs of SMEs
This paper investigates how the withdrawal of banks from their cross-border business impacted the borrowing costs of European firms since the crisis. We combine aggregate information on total and cross-border credit with firm-level survey data for the period 2010 - 2014. We find that the decline in cross-border lending led to a deterioration in the borrowing conditions of small firms. In countries with more pronounced reductions in cross-border credit inflows, the likelihood of a rise in firms’ external financing costs increased. This result is mainly driven by the interbank channel, which plays a crucial role in transmitting shocks to the real sector across borders
Borrowing Locally, Operating Globally? Financing and Trading Patterns of Firms during the 2007/2008 Economic Crisis
The theory of relationship lending is based on the idea that close ties between borrowers and banks may be economically beneficial. Information asymmetries on the part of the bank introduce adverse selection and moral hazard problems into the lending process and may lead to lengthy decision processes and/or reduce the availability of credit for firms. The recent financial and economic crisis, which has been marked by increased uncertainty about the creditworthiness of firms, has reduced the quantity of available credit or raised its costs. Being able to resort to a main bank might reduce the problem of information asymmetries and enable firms to maintain access to credit in times of economic hardship. However, formal studies investigating the role of main banks in dampening the crisis effect on firms global operations are still missing. This paper seeks to fill this gap by explaining crisis-related trade reductions with the bank type used at the firm-level. We find some evidence that using a local bank for external financing reduces the probability of an export decline
Don't stop me now: the impact of credit market fragmentation on firms' financing constraints
This paper investigates how the withdrawal of banks from their cross-border business impacted the borrowing costs of European firms since the crisis. We combine aggregate information on total and cross-border credit with firm-level survey data for the period 2010 - 2014. We find that the decline in cross-border lending led to a deterioration in the borrowing conditions of small firms. In countries with more pronounced reductions in cross-border credit inflows, the likelihood of a rise in firms’ external financing costs has increased. This result is mainly driven by the interbank channel, which plays a crucial role in transmitting shocks to the real sector across borders
External financial dependence and firms' crisis performance across Europe
Economic research has often relied on a measure of external financial dependence that is constructed using U.S. data and applied to other countries under the assumption of a stable industry ranking across countries. We exploit unique survey data from seven European countries to show that correlations of financial dependence across countries are weak, questioning this assumption. We then use the novel survey-based measure to show that the global financial crisis had a disproportionately negative impact on the real performance of financially dependent firms
Don't Stop Me Now: The Impact of Credit Market Segmentation on Firms' Financing Constraints
In this paper, we investigate how the withdrawal of banks from their cross-border business has impacted on firms' borrowing costs since the recent crisis. We combine aggregate information on total and cross-border credit with firm-level data from the Survey on the Access to Finance of SMEs in the euro area. We find that the decline in cross-border lending has led to a deterioration in the borrowing conditions of SMEs. First, in countries with more pronounced reductions in cross-border credit inflows to firms and banks, the likelihood of a rise in firm's external financing costs has significantly increased. Second, both actual and perceived financing constraints of SMEs have become more likely. This result is mainly driven by the interbank channel, which has played a crucial role in transmitting shocks to the real sector across borders
Changing forces of gravity: how the crisis affected international banking
The global financial crisis has brought to an end a rather unprecedented period of banks’
international expansion. We analyze the effects of the crisis on international banking. Using a
detailed dataset on the international assets of all German banks with foreign affiliates for the
years 2002-2011, we study bank internationalization before and during the crisis. Our data allow
analyzing not only the international assets of the banks’ headquarters but also of their foreign
affiliates. We show that banks have lowered their international assets, both along the extensive
and the intensive margin. This withdrawal from foreign markets is the result of changing market
conditions, of policy interventions, and of a weakly increasing sensitivity of banks to financial frictions
Untersuchung zur Rolle von Syndecan-4 in der Zytokin-abhängigen Knorpeldestruktion durch synoviale Fibroblasten bei der Rheumatoiden Arthritis:Untersuchung zur Rolle von Syndecan-4 in der Zytokin- abhängigen Knorpeldestruktion durch synoviale Fibroblasten bei der Rheumatoiden Arthritis
In der Dissertation untersuchte ich die Rolle des Heparansulfat Proteoglykans Syndecan-4 in der Zytokin- abhängigen Knorpeldestruktion durch synoviale Fibroblasten bei der Rheumatoiden Arthritis. Zum ersten Mal konnte eine krankheitsspezifische Hochregulation von Syndecan-4 sowohl in vitro als auch in vivo gezeigt und der damit verbundene Mechanismus der Zytokin- abhängigen Signaltransduktion aufgeklärt werden. Zusätzlich konnte eine Verstärkung der pro-inflammatorischen Signale durch Syndecan-4 bei der entzündlichen Knorpelzerstörung nachgewiesen werden. Somit konnte ich in meiner Arbeit zeigen, dass Syndecan-4 ein neues und interessantes Target bei der Aktivierung von Fibroblasten und der Matrixzerstörung bei der Arthritis und anderen entzündlichen Erkrankungen darstellt
External Financial Dependence and Firms' Crisis Performance Across Europe
How do financial market conditions affect real economic performance? Empirical investigations of this question have often relied on measures of external financial dependence (EFD) that are constructed using U.S. data and applied to other countries under the assumption of a stable industry ranking across countries. This paper exploits unique, comparable survey data from seven European countries to show that correlations of EFD across countries are weak, casting some doubt on this assumption. We then use the novel survey-based EFD index to show that the global financial crisis had a disproportionately negative impact on the real performance of financially dependent firms. Further investigations highlight the importance of supply chains in propagating the credit shock
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