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Working Paper
The Collateral Channel and Bank Credit
Our paper studies the role of the collateral channel for bank credit using confidential bank-firm-loan data. We estimate that for a 1 percent increase in collateral values,firms pledging real estate collateral experience a 12 basis point higher growth in banklending with higher sensitivities for more credit constrained firms. Higher real estatevalues boost firm capital expenditures and lead to lower unemployment and higheremployment growth and business creation. Our estimates imply that as much as 37percent of employment growth over the period from 2013 to 2019 can be attributed to the ...
Working Paper
The Collateral Channel and Bank Credit
Our paper studies the role of the collateral channel for bank credit using confidential bank-firm-loan data. We estimate that for a 1 percent increase in collateral values, firms pledging real estate collateral experience a 12 basis point higher growth in bank lending with higher sensitivities for more credit constrained firms. Higher real estate values boost firm capital expenditures and lead to lower unemployment and higher employment growth and business creation. Our estimates imply that as much as 37 percent of employment growth over the period from 2013 to 2019 can be attributed to the ...
Working Paper
The Collateral Channel and Bank Credit
We examine the firm-level and aggregate effects of the collateral channel using administrative bank-firm-loan level data. We introduce novel instrumental variables related to the efficiency of federal district bankruptcy courts and show their importance as predictors of collateral use and banks' expected losses given default across collateral types. Our estimates reveal that following increases in real estate values, firms that pledge real estate experience an expansion in bank credit, reductions in credit spreads, and an extension in the maturity of loans that allows for increases in firm ...