The causal effect of restrictive bank lending on employment growth: A matching approach

Does restrictive bank lending cause lower employment growth at the firm-level or does it reflect firm characteristics that drive the deterioration of employment figures? Applying propensity score matching, we estimate the treatment effect of restrictive bank lending on employment growth. Combining balance sheet information and survey data on a firm's current and expected future business situation, we rule out the impact of firm heterogeneity. We find that credit constraints have a significant negative effect on employment growth. Restricted firms also apply for short-time work more often, but this effect is small and not significant in all estimations

Are Real Effects of Credit Supply Overestimated? Bias from Firms' Current Situation and Future Expectations

This paper advocates for incorporating timely measures of firms' current situation and future expectations when disentangling real effects of credit supply from demand-side factors. Identification of supply-side effects in firm-level analyses often relies on balance sheet variables to control for firm heterogeneity. While balance sheets mirror past business, bias from contemporaneous and forward-looking firm-side factors may persist.Using German firm-level survey data from 2003 to 2011, we show that controllingfor firms' current situation and future expectations reduces upward bias in estimatedcredit supply-side effects on firm-level production. This is particularly important when market data is unavailable for firms

How does relationship banking influence credit financing? Evidence from the financial crisis

During the financial crisis asymmetric information in credit markets became moresevere. Did relationship banking help firms to avoid impaired credit financing andwhich credit financing problems did relationship banking help to circumvent? We usesurvey data for 1,139 German firms to analyze how relationship banking works. Wefind that it lowers the probability of higher information requirements from banks. Itdoes not, however, help to avoid constrained availability of bank credit. If credit isgranted, relationship banking makes deteriorated non-price contract terms (i.e. collateraland maturity) less likely. Its impact on interest rates is ambiguous

Friendship and money, oil and water? Credit constraints and "Family and Friends" finance

The use of informal finance is primarily discussed in the context of developing countries and start-up businesses. Survey data used in this study, however, shows that ``Family and Friends'' (F\&F) finance is also remarkably widespread among established firms in Germany, a highly developed country. Establishing a causal link, Instrumental Variables estimations in this study show that firms use F\&F finance in response to credit constraints. Considering that welfare gains from financial intermediation no longer materialize when firms go informal, this result is of utmost importance in the analysis of the consequences of a non-functioning financial system, even in developed economies

The causal effect of restrictive bank lending on employment growth: A matching approach

Does restrictive bank lending cause lower employment growth at the firm-level or does it reflect firm characteristics that drive the deterioration of employment figures? Applying propensity score matching, we estimate the treatment effect of restrictive bank lending on employment growth. Combining balance sheet information and survey data on a firm's current and expected future business situation, we rule out the impact of firm heterogeneity. We find that credit constraints have a significant negative effect on employment growth. Restricted firms also apply for short-time work more often, but this effect is small and not significant in all estimations

Intraretinal Transplantation for Rod-Cell Replacement in Light-Damaged Retinas

Blindness from retinal disease is often the consequence of extensive damage to the photoreceptor cell population, while other cell types which form the neural retina are relatively spared. In this setting, transplantation of photoreceptor cells could offer hope for the restoration of some degree of visual function. We testd the feasibility of this approach by transplanting immature retinal cells into the eyes of adult rats affected by late stage phototoxic retinopathy, which are almost totally devoid of photoreceptor cells