|
on European Economics |
|
Issue of 2026–03–02
twenty-one papers chosen by Simon Sosvilla-Rivero, Instituto Complutense de Análisis Económico |
| By: | Asdrubali, Pierfederico (European Commission); Testa, Giuseppina |
| Abstract: | Using a newly constructed dataset, this paper investigates the determinants of cross-regional venture capital (VC) flows within Europe through a structural gravity model |
| Keywords: | venture capital; cross-regional investment; structural gravity model, PPML, European regions, fixed effects |
| JEL: | G24 R11 C23 O33 R12 L26 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:bda:wpsmep:wp2025/46 |
| By: | Erwan Gautier (BANQUE DE FRANCE AND UNIVERSITÉ PARIS-DAUPHINE); Cristina Conflitti (BANCA D’ITALIA); Daniel Enderle (OESTERREICHISCHE NATIONALBANK AND VIENNA UNIVERSITY OF ECONOMICS AND BUSINESS); Ludmila Fadejeva (LATVIJAS BANKA); Alex Grimaud (OESTERREICHISCHE NATIONALBANK AND TU WIEN); Eduardo Gutiérrez (BANCO DE ESPAÑA); Valentin Jouvanceau (ECB AND LIETUVOS BANKAS); Jan-Oliver Menz (DEUTSCHE BUNDESBANK); Alari Paulus (EESTI PANK); Pavlos Petroulas (BANK OF GREECE); Pau Roldan-Blanco (UNIVERSITAT AUTÒNOMA DE BARCELONA, BARCELONA SCHOOL OF ECONOMICS AND CEPR); Elisabeth Wieland (ECB AND DEUTSCHE BUNDESBANK) |
| Abstract: | We use CPI micro data for nine euro area countries to document new evidence on consumer price stickiness in the euro area during the 2021-2024 inflation cycle. In 2022, the monthly frequency of price changes reached 12%, compared with an average of 8% over 2010–2019, roughly a four percentage point increase; it then fell quickly in 2023 and more slowly in 2024, ending close to its pre-pandemic level. The decline in the frequency of price changes was faster for food and non-energy industrial goods (NEIG) than for services, where frequencies remained elevated in 2024. The overall frequency rose mainly because there were more price increases, while the magnitude of the average size of the price increases or decreases changed only marginally during the surge. Products with a larger imported-energy cost share responded more strongly, and hazard-rate evidence shows that the probability of price adjustments increases with the gap between actual and optimal prices, consistent with state-dependent pricing and a steepening of the Phillips curve. To illustrate the implications of this state dependence, a macro model suggests that peak inflation would have been almost one percentage point lower had the frequency not responded to the inflation surge. |
| Keywords: | price rigidity, euro area, inflation surge, micro price data |
| JEL: | E31 E52 F33 L11 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2608 |
| By: | Lionel Fontagné (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris); Yoto V Yotov (Drexel University, Ifo Institute) |
| Abstract: | European integration is now faced with the question of strategic autonomy. Against this backdrop, this paper has three objectives. First, it uses disaggregated trade data and established empirical methods to assess the benefits of European integration on trade among the members of the European Union (EU) as well as on trade between EU members and non-member countries, including non-members that are part of the Single Market. Second, it evaluates the costs of EU strategic autonomy -implying not trading with "riskier" partners. Third, it asks whether deeper integration within the EU can alleviate these costs. The paper shows that the gains from European integration are substantial, albeit heterogeneous across Member States, non-members, and sectors, and that the costs of strategic autonomy can be offset by deeper, but comparatively more modest, integration efforts within the European Union. |
| Keywords: | Strategic Autonomy, Risky Suppliers, Trade, Single Market, European Integration |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:hal:cesptp:halshs-05512419 |
| By: | Spengel, Christoph; Gaul, Johannes; Göbel, Alexander; Gschossmann, Emilia; Gundert, Hannah; Jungmann, Felix; Käshammer, Daniel; Kindler, Cornelia; Pfrang, Alina; Porebski, Thu Thao; Schmidt, Christin; Schmidt, Katharina; Schulz, Inga; Spix, Julia; Weck, Stefan; Wickel, Sophia; Winter, Sarah Marie |
| Abstract: | This study examines the evolving landscape of anti-tax avoidance measures in the European Union (EU), focusing on the interplay between the Anti-Tax Avoidance Directive (ATAD), the EU Blacklist Code of Conduct on Business Taxation, various unilateral regulations, and the global minimum tax. Drawing on a comprehensive survey of local tax experts, we investigate how Member States have implemented the five core ATAD measures - interest barrier rules, exit taxation, controlled foreign company (CFC) rules, hybrid mismatch provisions, and general anti-abuse rules (GAAR) - as well as the EU Blacklist and additional national provisions such as royalty deduction limitations. The findings reveal a generally consistent adoption of ATAD rules, albeit with notable variation in strictness and scope across Member States. Furthermore, the study evaluates the interplay with the newly introduced global minimum tax. While this global measure primarily targets rate-based profit shifting, our analysis indicates that it may reinforce or partially overlap the EU's other directives - especially for countries that have already implemented extensive anti-tax avoidance legislation. We conclude by highlighting areas where policy refinements could enhance coherence - reducing complexity, avoiding double regulation, and strengthening the overall framework for combating tax avoidance within the EU. |
| Keywords: | Anti-Tax Avoidance, Taxation in the European Union, Global Minimum Tax |
| JEL: | H25 H26 K34 F23 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:336766 |
| By: | Mitra, Alessio (European Commission) |
| Abstract: | This paper explores the intersection of product complexity, economic relatedness, and macroeconomic determinants to identify industrial opportunities across European Union (EU) Member States |
| Keywords: | Economic complexity, relatedness, data-driven industrial policy, rule of law, research & development |
| JEL: | L52 L60 L70 O25 O30 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:bda:wpsmep:wp2025/44 |
| By: | Philipp Heimberger (The Vienna Institute for International Economic Studies, wiiw); Anna Matzner (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | We provide new evidence on the effects of fiscal consolidation measures on output, unemployment, income inequality and consumer price inflation. To identify causal impacts, we use a narrative-based instrumental variable strategy drawing on historical records of exogenous fiscal changes motivated by deficit reduction, covering 12 EU countries from 1980 to 2020. Our results for the short to medium run show that fiscal consolidations (a) lower real output; (b) raise the unemployment rate; (c) increase income inequality; and d) reduce consumer price inflation. Contractionary macroeconomic effects are stronger during recessions than during non-recession periods. |
| Keywords: | Fiscal consolidation, austerity, growth, unemployment, income inequality, European Union |
| JEL: | H60 E62 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:wii:wpaper:270 |
| By: | António Afonso; José Alves; Frederico Silva Leal |
| Abstract: | Using quarterly data for the period Q1:2000–Q4:2024, the study examines whether elections in EU‑27 member states shape the composition and timing of fiscal policy strategies, and how political, fiscal and institutional constraints condition these dynamics. Employing a two‑way fixed‑effects framework, we find evidence that elections consistently lead to increases in primary expenditure. These effects are visible across several components, namely compensation of employees, intermediate consumption, gross fixed capital formation, and other primary expenditure. Using alternative electoral windows reveals that some adjustments begin before the electoral year, particularly in the case of GFCF and other primary expenditure, suggesting medium‑term planning of politically salient spending. Importantly, these patterns emerge only around regular elections, with no evidence of political budget cycles in early elections. In addition, high‑debt countries tend to adopt more restrictive electoral strategies, EU membership moderates pre‑electoral spending, and coalition governments appear to impose additional fiscal discipline during election periods. Overall, the findings indicate that political budget cycles persist in the European Union, but their magnitude and composition depend critically on fiscal conditions, institutional frameworks, and governance structures. |
| Keywords: | political budget cycles, fiscal policy, elections, European Union |
| JEL: | D72 E62 H60 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12440 |
| By: | Moloney, Niamh |
| Abstract: | Examines the EU's capital markets union (CMU) agenda for financial markets, looking at the possibility of disruptive normative change to EU financial market governance including the limits of legislative reform, the likelihood of deregulation becoming a policy tool, and the risks to the CMU project. |
| Keywords: | deregulation; EU law; European Securities and Markets Authority; financial markets; financial regulation |
| JEL: | F3 G3 |
| Date: | 2025–01–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126176 |
| By: | Gianluigi Coppola (University of Salerno); Sergio Destefanis (University of Salerno); Giulia Nunziante (Sapienza University of Rome) |
| Abstract: | Most economists believe that cyclical factors do not impact on long-run total factor productivity. However, the Kaldorian approach maintains the existence of a significant positive relationship, while the opposite view is held by some economists, sometimes defined as Schumpeterian. In this paper we shed light on this issue disentangling the impact of the cycle on the change of technical efficiency («catch-up») from the impact on technical progress. We carry out this empirical exercise for 267 NUTS2 European regions, computing a Malmquist index of total factor productivity throughout 1995-2016. We find that the Great Recession elicits catch-up, while decisively lowering technical progress. Overall, long-run TFP growth significantly falls during the slump. We also report evidence for region groups selected across various sample cuts. In the samples dominated by regions belonging to new Member States, there is little catch-up due to the slump, and the Great Recession strongly reduces long-run TFP growth. There is also a group of low growth regions whose TFP growth is relatively insensitive to demand fluctuations. |
| Keywords: | catch-up, technical progress, Malmquist index, creative destruction |
| JEL: | O43 O47 R11 R53 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ahy:wpaper:wp66 |
| By: | Mastromarco, Camilla; Simar, Léopold (Université catholique de Louvain, LIDAM/ISBA, Belgium) |
| Abstract: | This paper proposes a novel nonparametric panel data framework for estimating conditional production frontiers and efficiency measures that explicitly accounts for spatial interdependencies. By integrating recent advances in nonparametric frontier estimation with spatial panel data analysis, the proposed approach offers a flexible and robust framework for assessing productivity and efficiency in the presence of spatial interactions, explicitly accounting for both global and local spatial effects. By extending recently developed tools for estimating Malmquist productivity indices to conditional nonparametric frontier efficiency models, we provide a refined decomposition of productivity growth into technological change, efficiency change, and scale effects within a fully nonparametric framework. Applying this framework to a comprehensive dataset on European regions, we provide new evidence on spatial patterns of productivity growth and efficiency dynamics across the EU. The results reveal marked heterogeneity in regional performance and highlight the crucial role of spatial spillovers in shaping productivity outcomes. Ignoring these interdependencies can lead to mismeasurement of productivity trends, reinforcing the value of our proposed spatial nonparametric frontier approach for policy and performance analysis. |
| Keywords: | Nonparametric Conditional Frontier ; Panel Data Model ; Spatial Dependence ; Productivity Analysis ; Malmquist Productivity Index ; EU Regional Performance |
| JEL: | C14 C13 C33 D24 O47 |
| Date: | 2025–11–13 |
| URL: | https://d.repec.org/n?u=RePEc:aiz:louvad:2025020 |
| By: | Florian Misch; Ben Park; Carlo Pizzinelli; Galen Sher |
| Abstract: | The discussion on Artificial Intelligence (AI) often centers around its impact on productivity, but macroeconomic evidence for Europe remains scarce. Using the Acemoglu (2024) approach we simulate the medium-term impact of AI adoption on total factor productivity for 31 European countries. We compile many scenarios by pooling evidence on which tasks will be automatable in the near term, using reduced-form regressions to predict AI adoption across Europe, and considering relevant regulation that restricts AI use heterogeneously across tasks, occupations and sectors. We find that the medium-term productivity gains for Europe as a whole are likely to be modest, at around 1 percent cumulatively over five years. While economically still moderate, these gains are still larger than estimates by Acemoglu (2024) for the US. They vary widely across scenarios and countries and are substantially larger in countries with higher incomes. Furthermore, we show that national and EU regulations around occupation-level requirements, AI safety, and data privacy combined could reduce Europe’s productivity gains by over 30 percent if AI exposure were 50 percent lower in tasks, occupations and sectors affected by regulation. |
| Keywords: | artificial intelligence, productivity, technology, regulation |
| JEL: | E24 J24 O30 O47 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12401 |
| By: | Weber, Karl Matthias; Dachs, Bernhard; Rozgonyi, Krisztina; Zweifler, Zoe; Beckert, Bernd; Gruber, Sonia; Hummler, Andreas; Kroll, Henning; Neuhäusler, Peter; Rothengatter, Oliver; Schwäbe, Carsten; Yang, Peipei |
| Abstract: | Germany and Europe are often said to lag behind the United States and China in the development and application of artificial intelligence technologies and other complementary technologies. Scientific, technological and ultimately economic performance in the field of this technology bundle, often referred to as the AI stack, depends not least on the institutional conditions for rapid technology development, scaling and implementation, in relation to which closer European cooperation, the provision of appropriate infrastructural and financial resources, and the intensification of cooperation between AI developers and users. In addition to a detailed analysis and evaluation of the performance of the EU and its member states in comparison with leading international countries on the basis of publication and patent data, the performance of various machine learning models and the international AI corporate landscape are also examined. Furthermore, the interaction of R&I policy, industrial policy and regulatory policy measures at EU level and in selected member states (Finland, France, the Netherlands, Austria and Germany) is compared with practices in international reference countries (China, the United Kingdom, India and the United States). On this basis, implications and possible options for action for German and European AI policy are identified. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:efisdi:336806 |
| By: | Giulia Martinelli (Gran Sasso Science Institute); Andrea Ascani (Gran Sasso Science Institute); Stefano Basilico (Gran Sasso Science Institute); Alberto Marzucchi (Gran Sasso Science Institute) |
| Abstract: | By integrating the literature on the twin transition with an international business perspective, this paper assesses whether the regional endowment of green, digital and twin occupations in the EU can act as a pull factor for inward foreign direct investment (FDI). We explore green, digital and twin skills per se as well as the role of their respective enabling (complementary) skills. We find a positive link of enabling skills on inward FDI, while focused digital and twin skills are generally not related to a higher level of FDI attractiveness. A high regional endowment of green skills may even have detrimental effects under specific circumstances. Our evidence paves the way for policies reinforcing locations with occupational complementarities between green, digital and twin competences in order to foster regional participation in global dynamics and favouring the twin transition. |
| Keywords: | green skills, digital skills, twin skills, FDI, EU regions |
| JEL: | F23 O33 O32 R11 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ahy:wpaper:wp79 |
| By: | Alexander Daminger (WIFO); Peter Huber; Klaus Nowotny |
| Abstract: | This paper examines the impact of the European Union's Cohesion Policy 2014-2020 on enterprise dynamics at the NUTS-2 level. Using discrete eligibility thresholds at 75 and 90 percent of EU average GDP per capita, we implement sharp and fuzzy regression discontinuity designs to assess effects on enterprise births and deaths, changes in the number of and employment in enterprises and local units. The analysis draws on ARDECO, DG REGIO, and Eurostat data, and considers both the full period (2014-2020) and a prepandemic subsample (2014-2019). We find no robust evidence of statistically significant discontinuities in treatment intensity at the thresholds, except under restrictive model assumptions. This lack of sharp jumps in funding intensity, combined with low statistical power, prevents credible identification of causal effects on enterprise outcomes. Moreover, diagnostic tests reveal structural breaks in key regional characteristics (e.g., sectoral structure, education, initial enterprise density) at the cutoffs, violating core RDD assumptions and suggesting confounding. We argue that institutional changes – the introduction of "transition regions" category, smoothed eligibility rules, and additional allocation criteria such as unemployment – have weakened the quasi-experimental nature of GDP-based thresholds. Future evaluations should rely on multiperiod designs and alternative identification strategies. |
| Keywords: | Regional Policy, Firm growth and demography, Evaluation |
| Date: | 2026–02–23 |
| URL: | https://d.repec.org/n?u=RePEc:wfo:wpaper:y:2026:i:720 |
| By: | Friedrich Heinemann; Jan Kemper |
| Abstract: | We examine the changing attention that ECB Governing Council members pay to different policy objectives by analysing more than 4, 600 speeches given between the establishment of the ECB and the summer of 2024. Alongside the primary objective of price stability, we consider the following potential secondary objectives: financial stability, stability of the government bond market, sustainable public debt, climate protection and distribution. On the methodological side, we take advantage of LLMs to identify the speeches’ coverage of each of these objectives and the associated support. We conduct a series of validation tests to verify our AI-based scores, including a conventional dictionary approach. We use two-way fixed effects regressions to search for a link between a country's level of public debt and the objective function of its representatives. The results suggest that objectives have become more diverse in recent years. An increase in the public debt-to-GDP ratio in a governor’s home country is associated with a shift in focus away from the primary objective and towards a growing coverage and support for secondary objectives. This general pattern is particularly robust for the distribution objective. These results can only be partly explained by governor selection. Therefore, in their communication, individual governors indicate shifts in their objective function in response to changes in the fiscal situation of their home country. |
| Keywords: | fiscal dominance, green monetary policy, large language model, text analysis |
| JEL: | E58 E52 H63 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12493 |
| By: | Begg, Iain |
| Abstract: | Brexit has been a decade-long process rather than discrete events, and has had enduring effects on the UK economy and society, as well as affecting former partners in the EU. While there is a broad consensus that the macroeconomic impact has been damaging to both sides, the incidence of Brexit on households, social groups and different economic sectors has been uneven. Overall, it has affected the UK more than the EU: an extensive study by Germany’s IFO Institut projected that the negative economic impact on the UK would be five times greater than on Germany, and minimal for Austria and Slovenia. This paper distinguishes between three broad categories of consequences of Brexit: economic, social and governance related. It starts with an overview of what was expected from Brexit, contrasting the ‘project fear’ narrative of the remain campaign with the promises of the leave campaigns about opportunities for re-orientating the UK economy towards more dynamic partner countries, curbing inflows of migrants and enabling better regulation. |
| JEL: | N0 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137085 |
| By: | Hinz, Julian; Langhammer, Rolf J.; Mahlkow, Hendrik; Thakur, Vasundhara |
| Abstract: | • The EU-India FTA generates mutual economic gains of 0.12-0.13% of GDP for both partners, with bilateral trade surging by 41-65%. • Since the 50 percentage points tariffs imposed by the US cost India 1.6% of GDP, the EU-India FTA provides a crucial hedge while the EU demonstrates commitment to open trade amid global protectionism. • The EU-India FTA results in a substantial trade diversion from China (an estimated 5-9%), supporting both EU de-risking objectives and India's supply chain diversification strategy. • The FTA's structural benefits persist regardless of US policy changes making this trade deal a long-term partnership, not a temporary hedge. |
| Abstract: | • Das EU-Indien-Freihandelsabkommen erzeugt beidseitige Wohlfahrtsgewinne von 0, 12-0, 13% des BIP, der bilaterale Handel steigt um 41-65%. • US-Zölle von 50 Prozentpunkten kosten Indien 1, 6% des BIP; das Abkommen bietet eine wichtige Absicherung, während die EU ihr Bekenntnis zum offenen Handel bekräftigt. • Die Handelsumlenkung weg von China ist erheblich (5-9%) und unterstützt sowohl die De-Risking-Ziele der EU als auch Indiens Diversifizierungsstrategie. • Die strukturellen Vorteile des Abkommens bestehen unabhängig von US-Politikänderungen - dies ist eine langfristige Partnerschaft, keine vorübergehende Absicherung. |
| Keywords: | EU-India FTA, Trade Policy, Tariffs, Supply Chain Diversification, De-risking, Freihandelsabkommen EU-Indien, Handelspolitik, Zölle, Diversifizierung der Lieferkette, Risikominimierung |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkpb:336759 |
| By: | Alexander Daminger (WIFO); Peter Huber; Klaus Nowotny |
| Abstract: | This paper evaluates EU Cohesion Policy interventions during 2014-2020 using regression discontinuity design (RDD), exploiting funding thresholds at 75 and 90 percent of EU average GDP per capita across 281 NUTS-2 regions. The analysis examines nominal and real GDP per capita growth, GDP per capita at purchasing power standards, and employment and unemployment changes. Contrary to earlier programming periods, the study finds no statistically significant discontinuity in treatment intensity near the cutoff thresholds under conventional RDD specifications with flexible functional forms and optimal bandwidth estimators. While marginally significant positive effects on real GDP growth emerge under restrictive assumptions, results lack robustness across model specifications. Pretests reveal potential structural breaks in other causal variables at the cutoffs. The findings provide descriptive evidence of positive correlations between regional development and cohesion policy but fail to establish robust causal links. This limitation likely stems from institutional changes during 2014-2020, including transition region introduction and modified allocation criteria that reduced funding discontinuity sharpness, or from pandemic-driven regional shocks. |
| Keywords: | Regional Policy, GDP Growth, Employment and unemployment, Evaluation |
| Date: | 2026–02–23 |
| URL: | https://d.repec.org/n?u=RePEc:wfo:wpaper:y:2026:i:721 |
| By: | Raab, Georg |
| Abstract: | This paper assesses the debt financing gap for SMEs, which undermines their competitiveness and leads to sub-optimal investments |
| JEL: | F34 G18 G21 G28 H81 M13 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:bda:wpsmep:wp2025/45 |
| By: | Francesco Decarolis |
| Abstract: | The energy crisis of 2022–2023 marked a turning point for European electricity markets. It exposed how tightly power prices remain linked to gas, how market volatility can destabilize investment, and how fragmented national responses can undermine the integrity of the internal energy market. In the wake of that shock, the European Union has placed electricitymarket reform at the center of its Clean Industrial Deal, coupling decarbonization with competitiveness and energy security. The 2024 Electricity Market Design (EMD) reform and forthcoming guidance on Contracts for Difference (CfDs) and Power Purchase Agreements (PPAs) aim to ensure that long-term investment signals coexist with short-run market efficiency. Yet implementation will determine success: translating legislative intent into market outcomes requires sound economic design and clear institutional coordination. This report was prepared to support that process. It analyzes how PPAs and CfDs can jointly mobilize private and public capital while preserving efficient dispatch and price discovery. Drawing on academic research, EU policy documents, and empirical evidence from different countries, the study provides a structured framework for reform. It links economic theory on incomplete markets and risk allocation to the operational experience of regulators, utilities, and corporate buyers. The analysis proceeds from the recognition that volatility in high renewable systems is not an anomaly but a structural feature, one that must be managed. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp26264 |
| By: | Kirschenmann, Karolin; Koch, Felicitas; von Schickfus, Marie-Theres; Hainz, Christa |
| Abstract: | We study how mandatory climate-related disclosure affects bank lending using the phased introduction of the EU Taxonomy Regulation. Exploiting the staggered development and implementation of the regulation, we distinguish banks' responses to anticipated disclosure requirements from their responses to realized firm-level sustainability information. Using syndicated loan data from 2016 to 2025 and a loan-level difference-in-differences design, we show that banks adjust lending to regulated firms with greater Taxonomy-eligible exposure following the 2019 announcement, reallocating credit toward similarly exposed non-regulated firms. Once firms report alignment, higher alignment is associated with larger loan volumes. We further show that banks adjust contractual terms to manage transition risk. |
| Keywords: | Green Finance, Climate Regulation, Sustainability Disclosure, Bank Lending |
| JEL: | G18 G21 G32 E43 Q51 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:336770 |