Suchergebnisse

We perform a cross-country firm-level analysis of all development banks headquartered in Europe. The goal is to investigate their financial profile and efficiency characteristics and to shed light on some crucial issues, which may underline their capacity to raise external sources of finance in addition to capital contributions from shareholder governments (e. g. their capital generation and cost efficiency, the quality of their loan portfolio, the composition of their sources of finance). A financial statement analysis of their accounting features is cogent in the light of the relevance attributed by European policy makers to the economic and financial sustainability of development banks, given the key role they have been called to play in the European economy since the 2008 crises. Indeed, although development banks have goals that go beyond profitability, they need to combine their socio-economic goals with conditions of efficiency and profitability, in order to "stand on their own feet" and secure a reasonable level of financial strength and stability. We first map all development banks headquartered in Europe. We then collect financial information within the reference period 2008 – 2018 for the whole population of development banks. We also split the sample according to size, in order to assess their dimensional heterogeneity. This study provides policymakers with quantitative information on the economic and financial profile of contemporary promotional financial institutions, which may be valuable in the current debate on their role and relevance in Europe.

This paper investigates whether the lending activity of European development banks is affected by opportunistic political behavior, by looking at the change in loans extended by these entities in election years. The empirical analysis leverages on a unique manually collected dataset that includes all the development banks headquartered in Europe, for the period 2002–2015. A comparison with the rest of the European banking system reveals that while the political view of development banks cannot be supported as a general rule, it finds empirical evidence in flawed democracies, where large development banks actually tend to increase their lending activity in election years.

Small and medium-sized enterprises (SMEs) suffered a sharp contraction in their borrowing from banks during the Great Recession. Analyzing a large firm-level database for European countries, the paper shows that trade credit amplified the liquidity squeeze on SMEs, with adverse effects on their real activity. SMEs sharply increased their net trade credit and thus transferred financial resources to larger firms. Given the large weight of SMEs in the economy of European countries, the liquidity squeeze of SMEs likely contributed to the depth of the output fall and the slow recovery in Europe during the Great Recession.

We find that European SMEs significantly increased their net trade credit to sales ratio during the Great Recession. For the aggregate of SMEs, trade credit did not provide any buffer to the contraction in bank loans. In fact, through increased net trade credit, SMEs suffered a squeeze in their liquidity and this phenomenon reflects the weak bargaining power of SMEs in their trade credit relationship with larger firms. Therefore, increased net trade credit by SMEs does not reflect an efficient reallocation of credit, and it calls for policy actions. These policy actions are highly relevant, given that the liquidity squeeze had significant adverse effects on the real performance of SMEs, contributing to the recession and to the subsequent timid recovery of European economies. We explore various policies that could be implemented to relieve SMEs from the liquidity squeeze induced by the increase in their receivables.

The Great Recession has generated renewed interest in the phenomenon of creditless recoveries. This paper studies the mechanisms behind such phenomenon, analyzing data on industries for a large set of countries over a forty year period from 1963 to 2003. We find that during creditless recoveries there is a significant reallocation of resources away from sectors that are more dependent on bank credit, both for their investments and for their short-term liquidity needs. The adverse effects of credit constraints are softened in sectors that rely more on alternative sources of financing, such as trade credit, or in sectors that have more favorable access to credit because of higher collateral. We thus conclude that creditless recoveries do not simply reflect a natural process of deleveraging, but they may imply significant inefficiencies in the allocation of resources.

Do development banks influence syndicate structure? Using a global dataset across 48 countries of 11,949 syndicated loans from 2001 to 2016, we show that lead banks decrease their loan shares and form less concentrated structures in mixed syndicates that include both development banks and private-sector banks as participant lenders. In line with the social view on the role of development banks, we find that such an effect is stronger during periods of financial instability, particularly for the green industry and in the case of borrowers that are financially constrained. Conversely, we do not find any evidence that mixed syndicates exhibit a different syndicate structure for political distortions. Lastly, we find that mixed syndicates are not associated with higher covenant violations and an increasing of the borrowers' risk profile after the loan origination. Our results are robust when accounting for, among others, relationship lending, asymmetric information within the syndicate, lenders' lending expertise, borrowers' opacity, types of loan, and ranking hierarchy in the syndicate.

Do development banks affect the structure of loan syndicates? We argue that development banks' participation in syndicates can reduce the lead banks' monitoring efforts and generate higher risk diversification across lenders. Using a global dataset of syndicated loans from 2001 to 2016 for 105 countries and 44,899 deals, we show that the lead banks decrease their loan shares and form less concentrated syndicates when development banks are participant lenders. These syndicates are also composed of a higher number of foreign lenders that retain greater loan shares. We also find that development banks are not associated with higher covenant violations. Our results are robust when accounting for relationship lending, asymmetric information within the syndicate, lenders' lending expertise, borrower opacity, types of loan, and ranking hierarchy in the syndicate, among others.

The chapter focuses on development financial institutions (DFIs) in Europe, that is public sector or government-invested legal entities with an explicit policy mandate to promote the socio-economic goals in a region, sector or specific market segment. DFIs play a relevant role in the economy, since they provide financial services to strategic sectors, sustain growth during period of recession, invest in physical and technological infrastructures. Besides, more recently, they are increasingly addressing their activity to yield social payoffs and positive externalities for society as a whole, such as stimulating technology innovation and channelling funds to long-term global societal challenges such as climate change, renewable and environmental-friendly energy, food security. In spite of their role in the economy, DFIs have not deserved a proper attention in the academic literature and they remain a quite under-analysed phenomenon. This chapter aims to fill this gap with a detailed analysis of firm-level characteristics and activities of contemporary European DFIs. Specifically, Section 2 introduces the phenomenon of development banks, explains the traditional theoretical framework where the existence of DFIs is discussed and why they represent a rising and important component of State Capitalism. Section 3 describes the characteristics of contemporary DFIs in Europe and discuss their growing role in funding innovation and supporting a response to global and new societal challenges. Section 4 presents the empirical analysis, which aims at discussing the role of DFIs as vehicles for state intervention in several sectors, with a specific focus on their strategic support to innovation. The dataset includes 132 entities, that is all the DFIs headquartered in Europe. Among them, 8 are sovranational, like the European Investment Banks, while the others are ultimately controlled by national (or even regional or local) governments. Economic and financial indicators are from Orbis, while information on DFIs mission, lending and funding activities, target industries and markets are collected case-by-case from annual reports, web sites and all public available information.

This paper explores the role of Development Financial Institutions (DFIs) in supporting innovation by facilitating the access to finance for start-ups and high-growth small and medium enterprises. After having mapped the population of DFIs in Europe, we benchmark their portfolio of equity deals to those of other European financial institutions (venture capital and private equity). We build a unique sample of European 12,437 M&As within the 2008–2017 period and for each target company we match the related patenting and economic data. We obtain a dataset of 80,713 yearly observations which allows us to empirically analyse the pre and post-deal patenting activity of companies targeted by both DFIs and other financial institutions. Our findings show that the target company patenting performance improves after receiving the support of financial institutions, and this effect is on average higher when DFIs participate to the equity deal. We also find that partnerships among DFIs and other financial institutions are associated with the best patenting performance of the target companies. These results are confirmed when a propensity score matching technique is adopted to address biases associated to the potential endogenous selection of the target company.