Spillover Effects in Empirical Corporate Finance

Tobias Berg*, Markus Reisinger, Daniel Streitz

*Corresponding author for this work

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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
JournalJournal of Financial Economics
Issue number3
Pages (from-to)1109-1127
Number of pages19
Publication statusPublished - Dec 2021

Bibliographical note

Published online: 7 May 2021


  • Spillovers
  • Direct vs. indirect effects
  • Credit supply

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