Discussion paper

DP12156 Specialization in Bank Lending: Evidence from Exporting Firms

We develop an empirical approach for identifying specialization in bank lending using granular data on borrower activities. We illustrate the approach by characterizing bank specialization by export market, combining bank, loan, and export data for all firms in Peru. We find that all banks specialize in at least one export market, that specialization affects a firm’s choice of new lenders and how to finance exports, and that
credit supply shocks disproportionately affect a firm’s exports to markets where the lender specializes in. Thus, bank market-specific specialization makes credit difficult to substitute, with consequences for competition in credit markets and the transmission
of credit shocks to the economy.

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Citation

Rappoport, V, D Paravisini and P Schnabl (eds) (2017), “DP12156 Specialization in Bank Lending: Evidence from Exporting Firms”, CEPR Press Discussion Paper No. 12156. https://cepr.org/publications/dp12156