Bank risk and firm investment: evidence from firm-level data

0570718 - NHU-C 2024 RIV US eng J - Journal Article
Shamshur, Anastasiya - Weill, L.
Bank risk and firm investment: evidence from firm-level data.
Journal of Financial Services Research. Roč. 63, č. 1 (2023), s. 1-34. ISSN 0920-8550. E-ISSN 1573-0735
R&D Projects: GA ČR GA19-20771S
Institutional support: Cooperatio-COOP
Keywords : bank risk * firm investment
OECD category: Applied Economics, Econometrics
Impact factor: 1.4, year: 2022
Method of publishing: Limited access
https://doi.org/10.1007/s10693-022-00379-y

Is higher bank risk-taking associated with more firm investment? Combining firm- and bank-level data, we examine the relation between bank risk and firm investment in a large sample of firms from nine European countries. We find that bank risk is positively associated with firm investment. Our finding accords with the modern theory of financial intermediation: risk taking by banks enhances firm investment as banks become more willing to perform their key function in the economy. Additionally, we also find that this positive relation is stronger for financially-constrained firms and when banks are more efficient.
Permanent Link: https://hdl.handle.net/11104/0342056