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on Corporate Finance |
| By: | Bauer, Peter; Domnick, Clemens; Harasztosi, Peter; Rückert, Désirée; Weiss, Christoph |
| Abstract: | We use the European Investment Bank Investment Survey (EIBIS) data to analyse the impact of the COVID-19 crisis on firm-level investment in tangible and intangible assets. We find considerable heterogeneity regarding the extent of the reduction of investment in different asset groups - with R&D investment declining the least, and investment in training and in machinery and equipment the most. This can be partly explained by the different income-elasticity of investments. Our results also suggest that financial constraints deterred investment activity both before and after the outbreak of the COVID-19 shock. These financing constraints were binding not only for tangible investment, but also for intangibles such as R&D and training. We find evidence for a higher sensitivity of R&D investments to the COVID-19 shock compared to tangible investments. Strong policy support implemented during the pandemic contributed to alleviating part of the negative impact of COVID-19 by mitigating the increase in the number of financially constrained firms |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:eibwps:306819 |
| By: | Joachim Jungherr; Matthias Meier; Timo Reinelt; Immo Schott |
| Abstract: | We provide novel empirical evidence that firms’ investment is more responsive to monetary policy when a higher fraction of their debt matures. In a heterogeneous firm New Keynesian model with financial frictions and endogenous debt maturity, two channels explain this finding: (1.) Firms with more maturing debt have larger roll-over needs and are therefore more exposed to fluctuations in the real interest rate (roll-over risk). (2.) These firms also have higher default risk and therefore react more strongly to changes in the real burden of outstanding nominal debt (debt overhang). Unconventional monetary policy, which operates through long-term interest rates, has larger effects on debt maturity but smaller effects on output and inflation than conventional monetary policy. |
| Keywords: | Monetary policy; Investment; Corporate debt; Debt maturity |
| JEL: | E32 E44 E52 |
| Date: | 2024–12–06 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgif:1402 |
| By: | Andrea Fazio (Marche Polytechnic University & GLO - Global Labor Organization); Erminia Florio (DEF, University of Rome "Tor Vergata" & HEC Montreal); Gustavo Piga (DEF, University of Rome "Tor Vergata") |
| Abstract: | This study investigates the impact of the Italian Legality Rating (LR) on small and medium enterprises (SMEs) in public procurement. The LR, issued by the Italian Antitrust Authority, evaluates firms based on fiscal transparency, anti-corruption practices, corporate responsibility, and sustainability. While larger firms are more likely to obtain higher LR scores, SMEs benefit significantly from holding the certification. Using firm-level data and a Regression Discontinuity Design, we find that the LR increases SMEs’ tender-winning probabilities by 12.9 percentage points, highlighting its role as a strong institutional signal. Our findings emphasize the LR’s potential to enhance SME competitiveness in public procurement. |
| Keywords: | SMEs, Legality Rating, Public Procurement |
| Date: | 2024–12–17 |
| URL: | https://d.repec.org/n?u=RePEc:rtv:ceisrp:587 |
| By: | Manthos D. Delis (Audencia Business School); Emilios C. Galariotis (School of Production Engineering and Management); Maria Iosifidi (Montpellier Business School); Steven Ongena (University of Zurich - Department Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR)) |
| Abstract: | Corporate taxation can have redistributive effects on income and wealth. We hypothesize and empirically establish such an effect working via bank credit. We use a unique sample of small majority- owned firms that apply for credit, where only some firms (treated) experience a corporate tax cut. We show that after the decrease in corporate tax rates, the treated poorer business owners get easier access to credit. However, this policy also considerably increases loan amounts and decreases loan spreads for the treated richer. Ultimately, reducing the corporate tax rate predominantly increases the future income and wealth of richer business owners. |
| Keywords: | Corporate taxes, Economic inequality, Bank credit, Credit score |
| JEL: | G20 G21 H25 D63 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2481 |
| By: | Lyu, Yanying (Tilburg University, School of Economics and Management) |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:tiu:tiutis:a636d1ce-f80d-4aa1-9b28-0b2a17c0a3e4 |