not only very poor countries with less than 1,000 USD real per capita income 3 years before the crisis such as Nepal or Indonesia, but also highly developed countries like USA or Norway with an income above 20,000 USD. A similar pattern is observable for the levels of financial development. The least developed country three years before the crisis has been Nepal which has only borrowed only about 8 percent of its GDP to the private sector. On the other edge Japan has borrowed almost twice its GDP. The crisis periods are spread throughout the whole period 1980-2000, however, the majority is concentrated in the period of the late 80s and early 90s. Even though, we have excluded all the twin crises, the average devaluations in the three year crisis windows are still substantial in some cases with an average of about 7 percent. Except of Costa Rica, all the countries have experienced at least one recession in the period for which we have data. Some of the recessions overlap with financial crisis periods, but in many cases both crises and recessions occur at times.

The measure of external finance dependence is based on data of listed US companies provided in Compustat and obtained from Rajan and Zingales (1998). They compute this variable as the fraction of capital expenditures that a company is not able to finance with internal funds. This measure is a good proxy for the reliance on external funds to cover long-term investments and dependence from banks. However, for exporters it is also important to be able to finance short term needs such as working capital, which is often covered through trade credit. To capture this component we will employ a measure proposed by Fisman and Love (2003) who define the sectoral dependence on trade finance as the ratio of accounts payable over total assets. Finally, as described in the Section 2 various studies have emphasized the importance of collateralizable assets in situations when the confidence in financial sector is low. Therefore, in our baseline estimations we will be also using a proxy for the ability of an industry to provide collaterals. This proxy is obtained from Kroszner, Laeven, and Klingebiel (2007) and is equal to the ratio of tangible assets in total assets.

The values of the measures external dependence on bank finance, trade credit and tangibility are reported in Table 2. The external dependence on bank finance is highest for the drugs industry and lowest for the tobacco industry that is able to generate more cash flow than it needs for its capital expenditures. High external dependence on bank finance does not necessarily imply a high dependence on trade credit. For example the spinning industry belongs to the least dependent on bank finance, but is the one of the most dependent on trade credit. Similarly high tangibility of an industry, e.g. pulp and paper, does not necessarily translate into a high dependence on long or short term finance. In Table 3 we show that the rank correlations between the three measures are indeed low and each of them should be able to provide a different dimension when examining the importance of the financial channel during a banking crisis.

In addition to the above variables we will be using a range of other control variables and alterna8