The collateral channel versus the bank lending channel: Evidence from a massive earthquake
Year: 2024
Type: article
Abstract: This paper examines the economic impact of the collateral and the bank lending channels simultaneously by taking advantage of exogenous shocks to a firm’s tangible assets and a bank’s net worth caused by the massive Tohoku earthquake in 2011. We obtain the following findings: (1) damages to a firm’s tangible assets and to the net worth of its primary banks lead to deterioration in firm’s credit availability, which lends support to the existence of both the collateral and the bank lending channels; (2) the relative impact of the bank lending channel is almost double that of the collateral channel; (3) firms that faced a tighter credit constraint after the earthquake have lower amount of borrowing outstanding and larger fall in the level of production and sales activities; (4) in aggregate, the damage caused by the earthquake and transmitted through the two channels substantially decrease output in the region.
Source: Journal of Banking & Finance
Language: English
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $3,240
Awards: Empirical studies on the determinants and effects of shareholding by banks, Effects of "Growth-oriented Corporate Tax Reform" on Firm Dynamics and Macroeconomy, Real Estate Market, Financial Crisis, and Economic Dynamics: An integrated approach from economics, Efficiency of Regional Financial Market and the Impact of the Covid-19 Infections, Present, past, and future of the regional financial market, 銀行業の将来像：銀行理論に基づく現代・近代比較実証分析による検討, Dynamics Prices of Goods, Services and Real Estate Japan: Understanding and Reconstructing Statistics Using Big Data, Empirical studies on the unit cost of financial intermediation and liquidity creation in Japan
OpenAlex ID: W4403321368