Karolin Kirschenmann's paper accepted in the Review of Finance
Article "Funding vs. real economy shock: The impact of the 2007-2009 crisis on small firms' credit availability" by Gunhild Berg (World Bank) and Karolin Kirschenmann has been accepted for publication in the Review of Finance.
Abstract:
We analyze how banks adjust their lending to small firms after distinct shocks from the cross-border transmission of the 2007-2009 crisis by using unique loan application and contract data from AccessBank Azerbaijan. These data allow us to disentangle the effects of a funding shock from the effects of a real shock. Contrary to conventional assumptions, we find that the funding shock works through reduced prospecting — as opposed to tightened lending standards — and leads to fewer loan applications among new applicants in particular, which improves the borrower pool. The real economy shock instead works through loan approval and affects SME rather than micro borrowers.
Information:
Paper can be downloaded from SSRN:
Read more news
AI-on-Demand platform expands to accelerate European AI innovation across research and industry
Aalto University’s Center for Knowledge and Innovation Research (CKIR) is proud to contribute
Postdoctoral researcher Bayan Karimi wins 2025 Young Scientist Prize
The prize is the 2025 IUPAP Young Scientist Prize for the Commission on Low Temperature Physics (C5).
Significant funding from Maa- ja vesitekniikan tuki for Olli Varis's research group
The InnoWAT project strengthens education in the water sector