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SME failures under large liquidity shocks : an application to the COVID-19 crisis / by Pierre-Olivier Gourinchas, Şebnem Kalemli-Özcan, Veronika Penciakova and Nick Sander.FB3-5/2023-32E-PDF

"We study the effects of financial frictions on firm exit when firms face large liquidity shocks. We develop a simple model of firm cost-minimization that introduces a financial friction that limits firms’ borrowing capacity to smooth temporary shocks to liquidity. In this framework, firm exit arises from the interaction between this financial friction and fluctuations in cash flow due to aggregate and sectoral changes in demand conditions, as well as more traditional shocks to productivity. To evaluate the implications of our model, we use firm-level data on small and medium-sized enterprises (SMEs) in 11 European countries"--Abstract.

Permanent link to this Catalogue record:
publications.gc.ca/pub?id=9.927517&sl=0

Publication information
Department/Agency
  • Bank of Canada, issuing body.
TitleSME failures under large liquidity shocks : an application to the COVID-19 crisis / by Pierre-Olivier Gourinchas, Şebnem Kalemli-Özcan, Veronika Penciakova and Nick Sander.
Series title
  • Staff working paper = Document de travail du personnel, 1701-9397 ; 2023-32
Publication typeMonograph - View Master Record
Language[English]
FormatDigital text
Electronic document
Note(s)
  • "Last updated: June 9, 2023."
  • Includes bibliographical references.
  • Includes abstract in French.
Publishing information
  • [Ottawa] : Bank of Canada = Banque du Canada, 2023.
  • ©2023
Author / Contributor
  • Gourinchas, Pierre-Olivier, author.
Description1 online resource (ii, 51 pages) : charts.
Catalogue number
  • FB3-5/2023-32E-PDF
Subject terms
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