This paper examines how for parent banks headquartered in the US and EU countries bank risk during the financial crisis of 2008-2009 was related to the size of banks’ internal capital market (ICM) and other bank characteristics in the pre-crisis period of 2002-2007. The results suggest that...

We show that multinational firms transmit shocks across countries through their internal capital markets. We study a credit supply shock to parent firms in Germany. International affiliates outside Germany supported their parents through internal lending, became financially constrained...

In this study, we reassess the links between commercial bank ownership and lending growth during the 1996-2019 period. We find evidence that the lending activities of foreign state-controlled and foreign privately owned banks differ, particularly during different crisis type periods and origins....

In this study, we reassess the links between commercial bank ownership and lending growth during the 1996-2019 period. We find evidence that the lending activities of foreign state-controlled and foreign privately owned banks differ, particularly during different crisis type periods and origins....

This chapter reviews cases, anecdotal evidence and academic studies on internal capital markets of Korean chaebol firms. Chaebols are business groups that are typically controlled by founding families and are known to have active internal capital markets. While internal capital markets may relax...

This paper examines whether the investment of Korean business group ("chaebol") affiliated firms behaved differently from that of non-chaebol firms in response to the COVID-19 outbreak. I show that chaebol firms cut back investment to a lesser degree than similar non-chaebol firms. Chaebol firms...

Using granular data on home builder housing developments from the 2006-09 housing crisis, I show that builders spread house price shocks across geographically distinct projects via their internal capital markets. Builders who experience losses in one area subsequently sell homes in unaffected...

This paper examines how investors perceive business group membership in Korea during the COVID-19 pandemic. Stock price performance analysis reveals evidence of a time-varying and heterogeneous value of affiliation: investors discount business group affiliation during a market collapse, but are...

We show that multinational firms transmit shocks across countries through their internal capital markets. We study a credit supply shock to parent firms in Germany. International affiliates outside Germany supported their parents through internal lending, became financially constrained...

A major risk currently facing the Chinese economy is overcapacity, which affects the efficiency of social resource allocation (Xi et al., 2017; Huang et al., 2019). When a company is in crisis, the internal capital market often plays a propping role. This study approached this issue from the...

A major risk currently facing the Chinese economy is overcapacity, which affects the efficiency of social resource allocation (Xi et al., 2017; Huang et al., 2019). When a company is in crisis, the internal capital market often plays a propping role. This study approached this issue from the...

I study how firm internal capital markets spread local housing shocks across geographically separate regions. I analyze this question in the context of the home builder industry during the 2006-09 housing crisis. I show that home builders who experience large asset write downs in one area,...

When external capital markets are stressed they may not reallocate resources between firms. We show that resource allocation within firms' internal capital markets provides an important force countervailing financial market dislocation. Using data on U.S. conglomerates we empirically verify that...

Using a data set of Korean business groups in the period 1999–2006, just after the Asian Financial Crisis, this study shows how business groups' financial leverage can lead group-affiliated firms to lose market share to industry rivals. This analysis reveals that the negative effect of group...