Working Paper: NBER ID: w17360
Authors: Stijn Claessens; Hui Tong; Shangjin Wei
Abstract: Using accounting data for 7722 non-financial firms in 42 countries, we examine how the 2007-2009 crisis affected firm performance and how various linkages propagated shocks across borders. We isolate and compare effects from changes in external financing conditions, domestic demand, and international trade on firms' profits, sales and investment using both sectoral benchmarks and firm-specific sensitivities estimated prior to the crisis. We find that the crisis had a bigger negative impact on firms with greater sensitivity to demand and trade, particularly in countries more open to trade. Interestingly, financial openness appears to have made limited difference.
Keywords: financial crisis; firm performance; transmission channels; international trade; demand sensitivity
JEL Codes: F3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| financial dependence (G59) | firm performance during the crisis (G01) |
| trade sensitivity (F14) | firm performance during the crisis (G01) |
| demand sensitivity (R22) | firm performance during the crisis (G01) |
| trade channel significant (F10) | firms reliant on exports performance during the crisis (F44) |
| domestic demand shock (D12) | firm performance during the crisis (G01) |