Using a unique dataset of more than 140,000 manufacturing firms in Japan containing information on their suppliers and customers, this paper looks at the physical distances be- tween transaction partners to examine the localization of transaction relationships. We find the following. First,...

We develop a simple model of financial intermediation with search and matching frictions between banks and firms. The model links credit market tightness - encapsulating the abundance of credit - to the search and opportunity costs of credit intermediation. Search costs generate lending to...

We develop a simple model of financial intermediation with search and matching frictions between banks and firms. The model links credit market tightness -encapsulating the abundance of credit- to the search and opportunity costs of credit intermediation. Search costs generate lending to...

This study examines whether staged project management is beneficial or harmful for making product innovations. Using a unique firm urvey for Japan, we find that firms that employed staged project management had a higher likelihood of introducing new products to the market. Additional estimations...

SME investment opportunities depend on the level of financing constraints that firms face. Earlier research has mainly focused on the controversial argument that cash flow-investment correlations increase with the level of these constraints. We focus on bank loans rather than cash flow. Our...

We investigate the impact of employment protection on firms' credit access by looking at both credit obtained from banks and firms' decision to apply for a loan. We find that greater flexibility in structuring the employees' working hours and in dismissing employees increases the probability...

We study the transmission of (unconventional) monetary policy to the real sector when firm decisions depend on both current and future credit market conditions. For a given level of current credit access, investment and employment increases more at firms expecting bank credit to improve in the...

This paper provides the first empirical evidence that bank regulation is associated with cross-border spillover effects through the lending activities of large multinational banks. We analyze business lending by 155 banks to 9613 firms in 1976 different localities across 16 countries. We find...

We investigate the effect of sovereign stress and of unconventional monetary policy on small firms’ financing patterns during the euro area debt crisis. We find that after the crisis started, firms in stressed countries were more likely to be credit rationed, both in the quantity and in the...