Spillovers to small business credit risk

W.F.M. Bams, Magdalena Pisa, Christian Wolff

Research output: Contribution to journalArticleAcademicpeer-review


Do large credit risk shocks spillover to small businesses and affect their real economic activity? Using information on small business credit risk, we find that small businesses experience increased default and bankruptcy rates following a shock to a customer industry. On an industry level, the shock to a customer industry is followed by a decrease in industry markups, disproportionate closure of firms, and cutbacks in inventories. Our analysis quantifies the elevated credit risk among small businesses and suggests a 0. 83% increase in expected losses on a diversified loan portfolio following a credit risk shock.
Original languageEnglish
Pages (from-to)323-352
Number of pages49
JournalSmall Business Economics
Issue number1
Early online date4 Jan 2020
Publication statusPublished - Jun 2021


  • Spillover effects
  • Supply chain
  • Small businesses
  • Credit risk


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