Banking globalization, local lending, and labor market effects: Micro-level evidence from Brazil

Arbeitspapier

Little is known about how banks' domestic funding networks affect the transmission of capital flows reversals to the real economy. Our robust results show that a foreign funding shock to banks in Brazil negatively affects lending by their regional branches, especially when they are subjected to funding fragmentation. This effect triggers a sizable drop in credit and job creation at the municipal level. Our findings suggest that despite substitution possibilities across banks and firms, banks' funding networks matter to explain the distributional effects of foreign financial shocks.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IWH Discussion Papers ; No. 7/2017

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Financial Markets and the Macroeconomy ; Financial Crises ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages
• Subject: capital flows reversals ; branch funding networks ; bank lending ; regional labor markets

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Noth, Felix ; Ossandon Busch, Matias
• Event: Veröffentlichung
• (who): Leibniz-Institut für Wirtschaftsforschung Halle (IWH)
• (where): Halle (Saale)
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/204436
• URN: urn:nbn:de:gbv:3:2-112341
• Last update: 10.03.2025, 11:43 AM CET