Research
Discussion Paper
PIERspectives
aBRIDGEd
PIER Blog
Events
Conferences
Research Workshops
Policy Forums
Seminars
Exchanges
Research Briefs
Community
PIER Research Network
Visiting Fellows
Funding and Grants
About Us
Our Organization
Announcements
PIER Board
Staff
Work with Us
Contact Us
TH
EN
Research
Research
Discussion Paper
PIERspectives
aBRIDGEd
PIER Blog
Exchange Rate Effects on Firm Performance: A NICER Approach
Latest discussion Paper
Exchange Rate Effects on Firm Performance: A NICER Approach
ผลกระทบของการขึ้นค่าเล่าเรียนต่อการตัดสินใจเรียนมหาวิทยาลัย
Latest aBRIDGEd
ผลกระทบของการขึ้นค่าเล่าเรียนต่อการตัดสินใจเรียนมหาวิทยาลัย
Events
Events
Conferences
Research Workshops
Policy Forums
Seminars
Exchanges
Research Briefs
Joint NSD-PIER Applied Microeconomics Research Workshop
Latest workshop
Joint NSD-PIER Applied Microeconomics Research Workshop
Special Economic Zones and Firm Performance: Evidence from Vietnamese Firms
Latest PIER Economics Seminar
Special Economic Zones and Firm Performance: Evidence from Vietnamese Firms
สถาบันวิจัยเศรษฐกิจป๋วย อึ๊งภากรณ์
Puey Ungphakorn
Institute for
Economic Research
Puey Ungphakorn Institute for Economic Research
Community
Community
PIER Research Network
Visiting Fellows
Funding and Grants
PIER Research Network
PIER Research Network
Funding & Grants
Funding & Grants
About Us
About Us
Our Organization
Announcements
PIER Board
Staff
Work with Us
Contact Us
Staff
Staff
Call for Papers: PIER Research Workshop 2025
Latest announcement
Call for Papers: PIER Research Workshop 2025
Discussion Paperdp
QR code
Year
2025
2024
2023
2022
...
27 January 2016
20161453852800000
No. 017

Bank Systemic Risk and Corporate Investment

Meg Adachi-SatoChaiporn Vithessonthi

Abstract

We develop a simple three-period model in which a bank's investment is influenced by short-term financing and a probability of a financial crisis. The presence of moral hazard problems in banks and firms causes (1) banks to take on riskier loans, (2) bank systemic risk to increase, and (3) firms to invest in riskier projects. We measure “bank systemic risk” using three measures that capture (1) bank funding maturity and (2) bank asset commonality. We document that in a sample of firms in 10 emerging markets and advanced economies bank systemic risk is positively associated with the firm-level investment ratio after controlling for the country's cross-sectional mean ratio of total loans to total assets of banks, country-level and firm-level variables until the start of the financial crisis of 2007. The effect becomes negative after 2007. We show that bank systemic risk strengthens the sensitivity of corporate investment to growth opportunities.

Meg Adachi-Sato
Meg Adachi-Sato
Chaiporn Vithessonthi
Chaiporn Vithessonthi
Sunway University Business School
Download full text
JEL: E22E44G21G31
Tags: banking systembank systemic riskcorporate investmentgrowth opportunitiesdeveloping countriesdeveloped countries
The views expressed in this workshop do not necessarily reflect the views of the Puey Ungphakorn Institute for Economic Research or the Bank of Thailand.
Meg Adachi-Sato
Meg Adachi-Sato
Chaiporn Vithessonthi
Chaiporn Vithessonthi
Sunway University Business School

Puey Ungphakorn Institute for Economic Research

273 Samsen Rd, Phra Nakhon, Bangkok 10200

Phone: 0-2283-6066

Email: pier@bot.or.th

Terms of Service | Personal Data Privacy Policy

Copyright © 2025 by Puey Ungphakorn Institute for Economic Research.

Content on this site is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported license.

Creative Commons Attribution NonCommercial ShareAlike

Get PIER email updates

Facebook
YouTube
Email