International Finance Flows and Misallocation: Evidence from micro data

Seminar abstract

Using detailed bank-firm matched data, we study the impact of international financial flows on misallocation. We exploit a boom of capital inflows in Italy and identify the patterns of credit allocation by banks with different exposure to such boom. We find that exposed banks tilt credit supply to high-productivity firms and that credit allocation reduces the dispersion of productivity having a positive impact on aggregate TFP growth. We explore alternative drivers of misallocation and find evidence that, in a context of raising financial deepening, the expansion of banks funded by an increase of bonds sold domestically is responsible.

How to attend this seminar

This seminar will take place on Wednesday 30 November at 2pm. It is free to attend with no need to register in advance.

We welcome you to join us in person at the Essex Business School Colchester campus in room EBS.2.41.

If you are unable to make it in persons we will also be linking live online. Please contact the seminar organiser (Dr Anna Sarkisyan) for the online details.

Speaker bio

Dr Fadi Hassan

Fadi Hassan is Senior Economist and Head of the International Financial Flows Unit of the Bank of Italy, he is Research Affiliate of the CEPR and Research Associate of the CEP-LSE. He obtained his PhD from LSE and before moving to the Bank of Italy he has been Assistant Professor of Economics at Trinity College Dublin and Visiting Scholar at Harvard University. His research interests are in the fields of international finance, trade, banking, and firms.