IMF Working Papers Volume 2017 Issue 038: Banks, Firms, and Jobs (2017)

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Banks, Firms, and Jobs

Author:

Fabio Berton

Fabio Bertonnull

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Sauro Mocetti

Sauro Mocettinull

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Mr. Andrea F Presbitero

Mr. Andrea F Presbitero
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https://orcid.org/0000-0003-4622-941X

, and

Matteo Richiardi

Matteo Richiardinull

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Series:: IMF Working Papers

Volume/Issue:: Volume 2017: Issue 038

Publication Date:: 14 Feb 2017

DOI:: https://doi.org/10.5089/9781475579017.001

ISBN:: 9781475579017

ISSN:: 1018-5941

Pages:: 57

Keywords:: WP; firm level; service sector; credit crunch; dependent variable; Bank lending channel; Job contracts; Employment; Financing constraints; Cleansing effect; employment decision; quarter FE; financing constraint; employment agency; firm FE; firm cluster; credit supply index; Credit; Bank credit; Loans; Labor force; Asia and Pacific; Global

Legal-disclaimer:: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Series:: IMF Working Papers

Volume/Issue:: Volume 2017: Issue 038

Language:: English

Publication Date:: 14 Feb 2017

DOI:: https://doi.org/10.5089/9781475579017.001

ISBN:: 9781475579017

ISSN:: 1018-5941

Pages:: 57

Keywords:: WP; firm level; service sector; credit crunch; dependent variable; Bank lending channel; Job contracts; Employment; Financing constraints; Cleansing effect; employment decision; quarter FE; financing constraint; employment agency; firm FE; firm cluster; credit supply index; Credit; Bank credit; Loans; Labor force; Asia and Pacific; Global

Legal-disclaimer:: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

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We analyze the employment effects of financial shocks using a rich data set of job contracts, matched with the universe of firms and their lending banks in one Italian region. To isolate the effect of the financial shock we construct a firm-specific time-varying measure of credit supply. The contraction in credit supply explains one fourth of the reduction in employment. This result is concentrated in more levered and less productive firms. Also, the relatively less educated and less skilled workers with temporary contracts are the most affected. Our results are consistent with the cleansing role of financial shocks.

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IMF Working Papers

ISSN:: 1018-5941

Publisher:: International Monetary Fund

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