The good, the bad, and the not-so-ugly of credit booms? capital allocation and financial constraints

Matías Braun, Francisco Marcet, Claudio Raddatz*

*Autor correspondiente de este trabajo

Producción científica: Contribución a una revistaArtículorevisión exhaustiva

Resumen

We provide international empirical evidence that periods of rapid expansion in credit—credit booms—lead to both a relaxation of financial constraints and a worsening of capital allocation. These two effects are related, suggesting a more prominent role for the investor sentiment views of the credit cycle. Firms more likely to be financially constrained because of their size, industry, or country experience stronger misallocation in booms. At the macro level, credit booms with higher capital misallocation result in a higher probability of experiencing a banking crisis and poor economic and financial performance after the boom ends.

Idioma originalInglés
Número de artículo107098
Páginas (desde-hasta)1-15
Número de páginas15
PublicaciónJournal of Banking and Finance
Volumen161
DOI
EstadoPublicada - abr. 2024

Nota bibliográfica

Publisher Copyright:
© 2024 Elsevier B.V.

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