Our results hold for a wide group of countries and over a long time span, but as I note below, have particular relevance to emerging market countries. While these results are consistent with a so-called credit channel impact of banking crises on real economic activity, there are further implications of the "credit channel" view that we explore in more detail.
Among firms that depend heavily on outside financing, young firms with short histories and firms with a large fraction of hard-to-measure intangible assets, for example, may have particular difficulties raising funds from the market due to information problems. Instead, such firms would tend to depend heavily on banks and other intermediaries for funding.