the degree of credit market imperfections. Design/methodology/approach – The authors use a novel firm-level dataset … proxy for credit-constraints at the firm-level. As additional proxies for the importance of credit market imperfections, we …, understanding whether credit market conditions affect the link between volatility and growth is of importance for policy makers …

by using matched bank-firm-level data on credit, employment, capital expenditure and TFP, we find that firm real estate … collateral as measured by tangible fixed assets plays a critical role. In particular, bank flow shocks increase the credit supply … to firms and sectors with more real estate collateral. Higher credit supply then leads firms to hire and invest more …