Corporate Finance http://lists.repec.org/mailman/listinfo/nep-cfn Corporate Finance 2026-05-18 Do Lending Standards Matter for Non-Financial Corporate Credit? Evidence from Albania https://d.repec.org/n?u=RePEc:fau:wpaper:wp2026_05&r=&r=cfn This study investigates the relationship between lending standards and credit dynamics in Albania. Using a unique bank-level dataset from the Bank Lending Standards Survey, we differentiate between newly issued domestic-currency and foreign-currency loans to non-financial corporations. We construct a quantitative index of lending standards using detailed bank-level and macro-financial data. The analysis reveals that tightening internal credit criteria, driven by macroeconomic uncertainty, regulatory constraints, or risk aversion, significantly reduces new business lending, weakening bank–firm relationships. In addition, we assess the role of monetary and macroprudential policies, finding that policy changes affect domestic-currency and foreign-currency credit differently, amplifying the impact of supply-side tightening. Firms face limited ability to offset these constraints through alternative lenders, reflecting low substitutability in the Albanian credit market. The effects of tightening are persistent and intensify during economic stress, yielding important implications for monetary transmission, macroprudential policy effectiveness, financial stability, and crisis resilience in small, bank-based economies. Meri Papavangjeli Lorena Skufi Adam Gersl Corporate credit growth; lending standards; credit supply shocks; bank lending behavior; firm financing 2026-05 Timing matters: Creditor incentives and delayed admission under India's IBC https://d.repec.org/n?u=RePEc:ind:igiwpp:2026-007&r=&r=cfn This paper examines how different classes of creditors use India's Insolvency and Bankruptcy Code (IBC), with a focus on the timing of insolvency initiation. Using a novel dataset that combines firm-level IBC admission records with financial data, we compare the characteristics of firms referred to IBC by financial creditors (primarily banks) and operational creditors. We find a systematic divergence. Firms brought to the IBC by financial creditors are significantly more stressed and highly leveraged-not only at the point of admission, but for several years prior. In contrast, firms referred by operational creditors are relatively less distressed and do not exhibit the same degree of pre-admission deterioration. These patterns persist across time and across bank types, and become more pronounced in the post-Covid period. This divergence points to a misalignment in creditor incentives, with important implications for the effectiveness of the IBC. More broadly, the results highlight that the success of a time-bound insolvency regime depends not only on resolution outcomes, but critically on the timing of entry into the process. Anjali Sharma Rajeswari Sengupta Corporate insolvency, Creditor incentives, Creditor heterogeneity, Firm distress, IBC effectiveness 2026-04 The Impact of EU Grants for Research and Innovation on Firms’ Performance https://d.repec.org/n?u=RePEc:euf:dispap:238&r=&r=cfn The paper evaluates the impact of the European Commission’s Seventh Framework Pro-gramme (FP7) grants on profit-oriented firms’ post-treatment performance. Using a robust quasi-experimental design and a dataset covering applicants from 46 countries, we find that FP7 grants increase firms’ sales and labour productivity by about 18%. However, there is no significant impact on employment levels, pointing to potential growth barriers that prevent firms from scaling production despite improved productivity. The effectiveness of these grants varies significantly based on factors such as financial constraints, project risk profiles, market structure, and the innovation environment. Smaller, less productive firms with tighter financial constraints in technology-intensive sectors operating in concentrated markets and favourable innovation environments, particularly those undertaking longer and riskier projects, tend to benefit more. Gábor Kátay Pálma Mosberger Francesco Tucci 2025-12 Innovation funding and startup growth: the kick-off of EU direct investment. https://d.repec.org/n?u=RePEc:eug:wpaper:ki-01-26-025-en-n&r=&r=cfn In this paper, we have conducted an econometric analysis of the impacts of the Accelerator scheme of the European Innovation Council (EIC), with a particular focus on the EU Blended Finance providing for the first time grant and direct equity - quasi-equity investment, by means of a difference-in-difference framework combined with propensity score matching and using firms who obtained a Seal of Excellence as control group. Our analysis highlights a number of significant impacts of the EIC Accelerator on firm performance measures like sales, capital stock, wage bill, average wage, employment and value of deals. The analysis also highlights the payment of the EIC direct equity investment as a key root of heterogeneous impacts on firm production factors and output and the lack of a differential impact for projects related to health. Giordano MION Aminata SISSOKO company growth, direct investment, EU investment, EIC fund, innovation, research and development, start-up 2026-03 The broader role of venture capital due diligence https://d.repec.org/n?u=RePEc:ehl:lserod:129338&r=&r=cfn Analyzing approximately 2, 000 applicants to a U.K. seed fund, this study examines how venture capital (VC) due diligence affects startup outcomes independent of funding decisions. Leveraging random reviewer assignment, we find that due diligence increases 2-year growth but lowers continuation rates among nonfunded applicants, reflecting a dynamic of accelerated scaling or exit. Evidence points to a learning mechanism: due diligence exposes founders to advanced website technologies, prompting capability building in digital skills. Firms selected for due diligence adopt these technologies, even before raising external capital. The findings highlight VC due diligence as a formative process influencing startups beyond the funded few. Gonzalez-Uribe, Juanita Klingler-Vidra, Robyn Wang, Su Yin, Xiang 2026-04-06 When banks borrow: Stock market reactions to loan announcements by financial vs. non-financial firms https://d.repec.org/n?u=RePEc:hal:journl:hal-05615325&r=&r=cfn We examine whether the stock market reacts differently to syndicated loan announcements when the borrower is a financial firm as opposed to a non-financial firm. We apply an event study methodology on a large cross-country dataset of nearly 30, 000 loan announcements, including over 2600 from financial companies. We find no evidence of systematic difference in market reactions between financial and non-financial companies under normal conditions, suggesting that the informational value of loans does not depend on the type of borrowing firm. However, during the COVID pandemic, reactions diverged sharply: loan announcements were associated with greater abnormal returns for non-financial firms, interpreted as survival signals, but lower abnormal returns for financial firms, reflecting investor concerns about risk and liquidity. These results emphasize that the interpretation of loan announcements can be context-dependent. Yohan Devillard Laurent Weill 2026-03-07 Cross-regional venture capital flows in Europe: The role of entrepreneurial ecosystems and proximity https://d.repec.org/n?u=RePEc:ipt:wpaper:202601&r=&r=cfn This paper examines whether, and under which conditions, regional entrepreneurial ecosystems mitigate spatial frictions in cross-regional venture capital (VC) investments. Using a dyadic panel of VC flows across 267 European NUTS-2 regions over 2008-2022, we estimate gravity-style regressions with high-dimensional fixed effects, distinguishing investments by stage and investor origin. Our results show that spatial frictions, particularly geographic and economic distance, remain important determinants of VC allocation. At the same time, regions with stronger entrepreneurial ecosystems attract higher VC inflows and exhibit lower sensitivity to institutional and structural differences. Differences across investor origins suggest that ecosystem legibility is most valuable when institutional uncertainty is high, such as for cross-border investors. Compano Ramon Johanyak Csaba Testa Giuseppina Zhen Ni Testa Giuseppina Tuebke Alexander 2026-04