New evidence from the sovereign debt crisis
14:00 - 16:00
Professor Serafeim Tsoukas
Lectures, talks and seminars
Essex Finance Centre
Essex Business School
Essex Finance Centre is delighted to welcome Professor Serafeim Tsoukas to our weekly research seminar series to present his paper, titled 'Bank Funding Shocks and Firm Performance: New Evidence From the Sovereign Debt Crisis'.
Empirical investigation of corporate failures has considered the effects of macroeconomic conditions and financial healthiness, but there is limited evidence about the real effects of bank shocks caused by the sovereign debt crisis. Using a rich source of high-quality firm-bank matched data over the period 2005-14, this paper examines the real effects of bank shocks on firms' survival prospects in Portugal. We first present evidence that a negative bank funding shock is associated with a reduction in credit supply. We further show that firms borrowing from banks that were exposed to a funding shock are more likely to fail. When we distinguish firms according to different firm-specific criteria, we uncover significant firm heterogeneity. Specifically, we document that firms that have drowned down their lines of credit, younger firms and those of high risk exhibit a higher sensitivity of firm failure to bank shocks compared to their counterparts.
Serafeim Tsoukas joined Economics at the University of Glasgow in January 2011, he is Professor in Corporate Finance and Banking and was previously an ESRC postdoctoral fellow at the University of Nottingham. He holds an Economics PhD from the University of Nottingham and further Economics degrees from the Universities of Nottingham (MSc) and Patras (BSc). He has also held visiting research positions at the Bank for International Settlements, the Hong Kong Monetary Authority, the Federal Reserve Bank of San Francisco and Columbia Business School.