The real effects of banks nationalization - evidence from the UK

How did the nationalization of UK operating banks as a result of the 2008 banking crisis impact their client firms' performance? We use unique firm-bank data and a propensity score matching technique and find that firms that borrowed from nationalized banks show a slight decrease in the growth...

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Published in:Applied economics letters 2022-04, Vol.29 (7), p.579-583
Main Authors: Spatareanu, Mariana, Manole, Vlad, Kabiri, Ali
Format: Article
Language:English
Subjects:
bank nationalization
Banking
Companies
Economic analysis
Economic theory
Economics
Employment
financial crisis
Firm performance
Innovations
Nationalization
Propensity
Short term debt
United Kingdom
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description How did the nationalization of UK operating banks as a result of the 2008 banking crisis impact their client firms' performance? We use unique firm-bank data and a propensity score matching technique and find that firms that borrowed from nationalized banks show a slight decrease in the growth of investment and innovation relative to firms that borrowed from non-nationalized banks. Interestingly, we find that firms that borrowed from nationalized banks slightly increase employment, short-term debt and cash holdings. Overall, these firms were able to maintain performance as a result of policy intervention.
doi_str_mv 10.1080/13504851.2021.1876206
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source EconLit s plnými texty; EBSCOhost Business Source Ultimate; International Bibliography of the Social Sciences (IBSS); Taylor and Francis Social Sciences and Humanities Collection
subjects bank nationalization
Banking
Companies
Economic analysis
Economic theory
Economics
Employment
financial crisis
Firm performance
Innovations
Nationalization
Propensity
Short term debt
United Kingdom
title The real effects of banks nationalization - evidence from the UK
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