https://hdl.handle.net/10438/29129 2021-11-21T10:55:23Z https://hdl.handle.net/10438/29171 The real effects of bank-firm relationships Behr, Patrick Gottfried; Norden, Lars; Oliveira, Raquel de Freitas We investigate whether and how bank relationships affect real economic activity. We base our analysis on matched credit and labor data from Brazilian firms during 2005-2014. We document that firms with more bank relationships employ more workers and pay higher wages. Moreover, increases (decreases) of bank relationships result in higher (lower) economic activity. These effects are independent of firm size and due (but not limited) to higher credit availability and lower cost of credit. Importantly, the firm-level results consistently translate into positive macroeconomic effects at the municipality and state level. The evidence suggests positive real effects of multiple bank relationships. 2018-10-31T00:00:00Z https://hdl.handle.net/10438/29170 Substitution effects in SME finance Norden, Lars; Kampen, Stefan van; Illueca, Manuel We investigate whether SMEs with demand for credit increase their trade credit usage after they experience a negative shock to bank credit. We base our analysis on a large sample of SMEs from the five biggest European countries. First, SMEs’ ability to substitute largely depends on their credit quality. Second, substitution decreases during the financial crisis of 2007-09. Third, high credit quality firms with moderate financial constraints are the most likely to substitute. We confirm these results on a subsample with matched bank-firm data. The evidence highlights the limits of substitution in SME finance. 2018-03-20T00:00:00Z