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Banks, Firms, and Jobs

Author

Listed:
  • Fabio Berton

    () (University of Torino)

  • Sauro Mocetti

    () (Bank of Italy)

  • Andrea F. Presbitero

    () (International Monetary Fund and MoFiR)

  • Matteo Richiardi

    () (Institute for New Economic Thinking, University of Oxford; Nuffield College, and Collegio Carlo Alberto)

Abstract

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.

Suggested Citation

  • Fabio Berton & Sauro Mocetti & Andrea F. Presbitero & Matteo Richiardi, 2017. "Banks, Firms, and Jobs," Mo.Fi.R. Working Papers 136, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    • Handle: RePEc:anc:wmofir:136
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    Cited by:

    1. Bodnár, Katalin & Fadejeva, Ludmila & Hoeberichts, Marco & Peinado, Mario Izquierdo & Jadeau, Christophe & Viviano, Eliana, 2011. "Credit shocks and the European labour market," Working Paper Series 2124, European Central Bank.
    2. Cornille, David & Rycx, Francois & Tojerow, Ilan, 2018. "Heterogeneous Effects of Credit Constraints on SMEs' Employment: Evidence from the Great Recession," IZA Discussion Papers 11257, Institute for the Study of Labor (IZA).
    3. Matteo Bugamelli & Francesca Lotti & Monica Amici & Emanuela Ciapanna & Fabrizio Colonna & Francesco D’Amuri & Silvia Giacomelli & Andrea Linarello & Francesco Manaresi & Giuliana Palumbo & Filippo Sc, 2018. "Productivity growth in Italy: a tale of a slow-motion change," Questioni di Economia e Finanza (Occasional Papers) 422, Bank of Italy, Economic Research and International Relations Area.
    4. Beck, Thorsten & Da-Rocha-Lopes, Samuel & Silva, Andre, 2017. "Sharing the Pain? Credit Supply and Real Effects of Bank Bail-ins," CEPR Discussion Papers 12058, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    Bank lending channel; Job contracts; Employment; Financing constraints; Cleansing effect.;

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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