Spillover Effects in Empirical Corporate Finance

Tobias Berg, Markus Reisinger, Daniel Streitz

Research output: Working paperResearch


Despite their importance, the discussion of spillover effects in empirical research often misses the rigor dedicated to endogeneity concerns. We analyze a broad set of workhorse models of firm interactions and show that spillovers naturally arise in many corporate finance settings. This has important implications for the estimation of treatment effects: i) even with random treatment, spillovers lead to a complicated bias, ii) fixed effects can exacerbate the spillover-induced bias. We propose simple diagnostic tools for empirical researchers and illustrate our guidance in an application.
Original languageEnglish
Place of PublicationLondon
PublisherCentre for Economic Policy Research
Number of pages58
Publication statusPublished - Dec 2020
SeriesCentre for Economic Policy Research. Discussion Papers


  • Spillovers
  • Direct vs. indirect effects
  • Credit supply

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