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From the Financial Crisis to the Real Economy: Using Firm-level Data to Identify Transmission Channels

  • Stijn Claessens
  • Hui Tong
  • Shang-Jin Wei

Using accounting data for 7722 non-financial firms in 42 countries, we examine how the 2007-2009 crisis affected firm performance and how various linkages propagated shocks across borders. We isolate and compare effects from changes in external financing conditions, domestic demand, and international trade on firms' profits, sales and investment using both sectoral benchmarks and firm-specific sensitivities estimated prior to the crisis. We find that the crisis had a bigger negative impact on firms with greater sensitivity to demand and trade, particularly in countries more open to trade. Interestingly, financial openness appears to have made limited difference.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17360.

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Date of creation: Aug 2011
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Publication status: published as Claessens, Stijn & Tong, Hui & Wei, Shang-Jin, 2012. "From the financial crisis to the real economy: Using firm-level data to identify transmission channels," Journal of International Economics, Elsevier, vol. 88(2), pages 375-387.
Handle: RePEc:nbr:nberwo:17360
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