Finance Webinar（2020-07)

Topic: Credit Supply and (In)organic Growth

Speaker: Tobias Berg, Frankfurt School of Finance & Management

Time: Wednesday, 13 May, 16:00-17:30 Beijing Time

Location: Microsoft Teams Online conference room

Abstract:

This paper highlights the importance of distinguishing between organic and inorganic growth when measuring real effects of financial frictions. Exploiting a quasi-exogenous positive shock to credit supply, we document that affected firms borrow larger amounts and exhibit stronger asset, employment, and sales growth. All growth effects, however, are inorganic, and the quality of the credit supply induced acquisition activity is low. We provide a method for adjusting for inorganic growth components empirically and argue that it is important to distinguish inorganic from organic growth in any study that analyzes real effects of credit supply.

Introduction:

Tobias Berg is Professor of Finance at Frankfurt School of Finance & Management. He was previously Assistant Professor of Finance at the University of Bonn and a visiting scholar at the Stern School of Business, New York University (NYU) as well as the European Central Bank. Prior to that he worked as Project Leader at the Boston Consulting Group. Tobias Berg works in the area of financial intermediation and corporate finance and focuses on risk management, bank regulation, and real effects of financial intermediation. His research was published in leading international journals such as the Journal of Finance, Review of Financial Studies, or Journal of Financial and Quantitative Analysis and he has presented at conferences such as the AFA, WFA, and EFA. He has won several best paper awards for his work, was ranked among the Top 10 economists in Germany in 2019, and has received the Review of Financial Studies Distinguished Referee Award in 2019. He teaches financial intermediation, corporate finance, and asset pricing and has won a best teaching award for a master course in corporate finance.

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