The financial crisis of 2007-2008 has had an important impact on the real economy, particularly in Europe: analyzing the transmission channels through which this happened is however far from simple. We focus on the effect of financial constraints on the performance of manufacturing firms by employing several indirect measures of such constraints. We first study non-parametrically the relation between credit exposition and growth of firms, providing robust evidence that such relation has changed sharply from the pre-crisis period to the post-crisis one. We then enrich an existing model of market selection with proxies of financial constraints, originating both from raw balance sheet data, and with data from the SAFE survey on access to credit, ran by the ECB on a vast sample of European firms. We confirm that firms which tend to rely more on external financing performed worse in the aftermath of the crisis, and that the propensity to have suffered from financing constraints is also a predictor of low growth.
Institute of Economics, Sant’Anna School of Advanced Studies (Italy)
Observatoire Français des Conjonctures Economiques (OFCE), France, and Université Côte d’Azur, SKEMA, CNRS, GREDEG, France,
and Scuola Superiore Sant’Anna, Pisa (Italy)