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18 Nov 2015

Banking Globalization, Local Lending and Labor Market Outcomes: Micro-level Evidence from Brazil

This paper estimates the effects of banks' foreign exposures on local lending and labor markets in the aftermath of the 2008-2009 world financial crisis for the Brazilian financial systems. The analysis focuses on two dimensions of banks' foreign exposures: foreign ownership and foreign funding. Our results suggest that both exposure dimensions represent distinct transmission mechanisms affecting lending performance on the level of Brazilian municipalities. We are able to trace the transmission channel on the level of the balances sheets of local branches and find that the presence of foreign owned and funded banks affect labor market outcomes in the form of job creation and job destruction. 

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  • Felix Noth, Halle Institute for Economic Research/University of Magdeburg

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    Gustav-Schmoller-Raum DIW Berlin im Quartier 110 Room 3.3.002A Mohrenstraße 58 10117 Berlin
    at DIW Berlin
    Tel.: +49 30 89789 492