Número:
1
Publicado:

Lo más reciente
Julián Arteaga, Nicolás de Roux, Heitor S. Pellegrina, Margarita María Gáfaro-González, Julián Arteaga, Ana María Ibáñez Londoño
Franz Alonso Hamann-Salcedo, Franz Alonso Hamann-Salcedo, Sara Naranjo-Saldarriaga, José Pulido
Juan Pablo Bermúdez-Cespedes, Juan Pablo Bermúdez-Cespedes, Luis Fernando Melo-Velandia
We investigate the impact of fiscal expansions on firm investment by exploiting firms with multiple banking relationships. Further, we conduct a localized approach and compare the lending behavior of banks that barely met and missed the criteria of being a primary dealer, as well as barely winners and losers at government auctions. Our results indicate that a 1 percentage point increase in primary dealer banks' bonds-to-assets ratio decreases loans by 0.2 percent, which leads to declines in firm investment, profits, and wages. Our findings are grounded in a quantitative model with which we compute the cost of borrowing on the economy.