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The cleansing effect of banking crises

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dc.contributor.authorGropp, Reint
dc.contributor.authorOngena, Steven
dc.contributor.authorRocholl, Jörg
dc.contributor.authorSaadi, Vahid
dc.contributor.funderHorizon 2020 Framework Programme
dc.contributor.funderInstitute of Infection and Immunity
dc.contributor.funderBank of Canada
dc.contributor.funderEuropean Research Council
dc.contributor.funderGoethe Universität Frankfurt am Main
dc.contributor.funderBocconi University
dc.contributor.funderIvey Business School
dc.contributor.funderWestern University
dc.contributor.funderGöteborgs Universitet
dc.contributor.funderHumboldt Universität zu Berlin
dc.contributor.funderFreie Universität Berlin
dc.contributor.rorhttps://ror.org/02jjdwm75
dc.date.accessioned2024-07-08T13:14:16Z
dc.date.available2024-07-08T13:14:16Z
dc.date.issued2022
dc.description.abstractWe assess the cleansing effects of the 2008–2009 financial crisis. U.S. regions with higher levels of supervisory forbearance on distressed banks see less restructuring in the real sector: fewer establishments,firms,and jobs are lost when more distressed banks remain in business. In these regions,the banking sector has been less healthy for several years after the crisis. Regions with less forbearance experience higher productivity growth after the crisis with more firm entries,job creation,and employment,wages,patents,and output growth. Forbearance is greater for state-chartered banks and in regions with weaker banking competition and more independent banks. © 2022 Western Economic Association International.
dc.description.fundingtypeWe would like to thank our discussants (in order of their engagement) Giovanni Dell'Ariccia, Jesper Rangvid, Gilbert Cette, Philippos Petroulakis, Francisco Covas, Alvaro Remesal, Sergio Vicente and José-Luis Peydro, and Qinglai Meng (the editor) and three anonymous referees for all their helpful comments. We also thank participants at the 2017 Arne Ryde conference on financial intermediation, the BIS-IMF-OECD joint conference on weak productivity, the conference on the Real Effects of Financial Crises at Goethe University in Frankfurt, the 2018 Chicago Financial Institutions Conference, the 1st Biennial Bank of Italy and Bocconi University conference on “Financial Stability and Regulation” the 26th Finance Forum, the III Madrid-Barcelona Workshop on Banking and Corporate Finance, the 6th Emerging Scholars in Banking and Finance Conference and seminar attendees at the University of Gothenburg, Humboldt University and Free University of Berlin, Bank of Canada and IE Business School. Ongena acknowledges financial support from ERC ADG 2016 – GA 740272 lending. 1, We would like to thank our discussants (in order of their engagement) Giovanni Dell'Ariccia, Jesper Rangvid, Gilbert Cette, Philippos Petroulakis, Francisco Covas, Alvaro Remesal, Sergio Vicente and José-Luis Peydró and Qinglai Meng (the editor) and three anonymous referees for all their helpful comments. We also thank participants at the 2017 Arne Ryde conference on financial intermediation, the BIS-IMF-OECD joint conference on weak productivity, the conference on the Real Effects of Financial Crises at Goethe University in Frankfurt, the 2018 Chicago Financial Institutions Conference, the 1st Biennial Bank of Italy and Bocconi University conference on “Financial Stability and Regulation”, the 26th Finance Forum, the III Madrid-Barcelona Workshop on Banking and Corporate Finance, the 6th Emerging Scholars in Banking and Finance Conference and seminar attendees at the University of Gothenburg, Humboldt University and Free University of Berlin, Bank of Canada and IE Business School. Ongena acknowledges financial support from ERC ADG 2016 – GA 740272 lending.
dc.description.keywordbanking crises
dc.description.keywordcleansing effect
dc.description.keywordproductivity growth
dc.description.keywordsupervisory forbearance
dc.formatapplication/pdf
dc.identifier.citationGropp, R., Ongena, S., Rocholl, J., & Saadi, V. (2022). The cleansing effect of banking crises. Economic Inquiry, 60(3), 1186-1213.
dc.identifier.doihttps://doi.org/10.1111/ecin.13069
dc.identifier.issn952583
dc.identifier.officialurlhttps://www.scopus.com/inward/record.uri?eid=2-s2.0-85124476128&doi=10.1111%2fecin.13069&partnerID=40&md5=b532d506a402ef7a4697f600fd33bab5
dc.identifier.urihttps://hdl.handle.net/20.500.14417/3038
dc.issue.number3
dc.journal.titleEconomic Inquiry
dc.language.isoeng
dc.page.final1213
dc.page.initial1186
dc.publisherJohn Wiley and Sons Inc
dc.relation.departmentFinance
dc.relation.entityIE University
dc.relation.projectIDH2020: 740272
dc.relation.schoolIE Business School
dc.rightsAttribution Non-Commercial 4,0 International
dc.rights.accessRightsinfo:eu-repo/semantics/openAccess
dc.rights.urihttps://creativecommons.org/licenses/by-nc/4.0/
dc.subjectbanking crises; cleansing effect; productivity growth; supervisory forbearance
dc.subject.keywordbanking crises
dc.subject.keywordcleansing effect
dc.subject.keywordproductivity growth
dc.subject.keywordsupervisory forbearance
dc.titleThe cleansing effect of banking crises
dc.typeinfo:eu-repo/semantics/article
dc.version.typeinfo:eu-repo/semantics/publishedVersion
dc.volume.number60
dspace.entity.typePublication
person.identifier.scopus-author-id55913580000
person.identifier.scopus-author-id6602596464
person.identifier.scopus-author-id24484948000
person.identifier.scopus-author-id57211084808
relation.isAuthorOfPublication3c06e4e5-be49-4aef-9862-76248592b704
relation.isAuthorOfPublication.latestForDiscovery3c06e4e5-be49-4aef-9862-76248592b704
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