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Supply Chain Network and Credit Supply

Author

Listed:
  • Kensuke Fukunaga

    (Economist, Institute for Monetary and Economic Studies, Bank of Japan (currently, Senior Analyst, UTokyo Economic Consulting Inc., E-mail: kensuke_fukunaga@utecon.net))

  • Daisuke Miyakawa

    (Associate Professor, Hitotsubashi University Business School (E-mail: dmiyakawa@hub.hit-u.ac.jp))

Abstract

How do supply chain networks affect credit supply? To answer this question, we empirically detect clusters of firms by using firm-to- firm transaction data, then measure banks' exposures to those clusters and borrowing firms by using bank-to-firm lending data. Through the panel estimations controlling for unobservable factors potentially affecting credit demand and supply, first, we find that the higher portfolio concentration of banks on the clusters of firms lowers credit supply to less creditworthy firms. Second, we also find that such a pattern is more apparent for banks lending to creditworthy firms. These results suggest that the change in real network propagates to credit supply through banks' risk management.

Suggested Citation

  • Kensuke Fukunaga & Daisuke Miyakawa, 2022. "Supply Chain Network and Credit Supply," IMES Discussion Paper Series 22-E-08, Institute for Monetary and Economic Studies, Bank of Japan.
    • Handle: RePEc:ime:imedps:22-e-08
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    File URL: https://www.imes.boj.or.jp/research/papers/english/22-E-08.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Credit supply; supply chain network; cluster detection;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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