Discussion Paper Series 2022-E-8

Supply Chain Network and Credit Supply

Kensuke Fukunaga, Daisuke Miyakawa

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.

Keywords: Credit supply; supply chain network; cluster detection


Views expressed in the paper are those of the authors and do not necessarily reflect those of the Bank of Japan or Institute for Monetary and Economic Studies.

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