International bank credit, nonbank lenders, and access to external financing

Serena, J.-M., Spaliara, M.-E. and Tsoukas, S. (2022) International bank credit, nonbank lenders, and access to external financing. Economic Inquiry, 60(3), pp. 1214-1232. (doi: 10.1111/ecin.13078)

Abstract

Using a cross-country firm-bank dataset, we examine how an unexpected increase in bank capital requirements by the European Banking Authority affects firms' financial choices. We find that the regulatory shock implies a reduction in the supply of bank credit, with US firms affected the most. Yet, US firms can tap into the public bond markets and secure credit lines from nonbank financial institutions. This has implications for their capital structure and their real outcomes. These results suggest that diversified domestic loan markets, in which banks and nonbank financial institutions lend to corporations, can help overcome reductions in cross-border bank funding.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Spaliara, Professor Marina Eliza and Tsoukas, Professor Serafeim
• Authors: Serena, J.-M., Spaliara, M.-E., and Tsoukas, S.
• Subjects: H Social Sciences > HG Finance
• College/School: College of Social Sciences > Adam Smith Business School
• Journal Name: Economic Inquiry
• Publisher: Wiley
• ISSN: 0095-2583
• ISSN (Online): 1465-7295
• Published Online: 08 March 2022
• Copyright Holders: Copyright © 2022 The Authors
• First Published: First published in Economic Inquiry 60(3): 1214-1232
• Publisher Policy: Reproduced under a Creative Commons License