Aleksandr Kazakov

Aleksandr Kazakov
Current Position

since 9/20

Economist in the Department of Financial Markets

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

Research Interests

  • subsidy programmes
  • banking

Aleksandr Kazakov joined the Department of Financial Markets as a doctoral student in September 2020. His research focuses on bank stability, the effectiveness of subsidy programmes as well as the banking system and productivity.

Aleksandr Kazakov received his bachelor's degree from St Petersburg University and his master's degree from Friedrich Schiller University Jena .

Your contact

Aleksandr Kazakov
Aleksandr Kazakov
Mitglied - Department Financial Markets
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Publications

Working Papers

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Firm Subsidies, Financial Intermediation, and Bank Risk

Aleksandr Kazakov Michael Koetter Mirko Titze Lena Tonzer

in: IWH Discussion Papers, No. 2, 2022

Abstract

We study whether government subsidies can stimulate bank funding of marginal investment projects and the associated effect on financial stability. We do so by exploiting granular project-level information for the largest regional economic development programme in Germany since 1997: the Improvement of Regional Economic Structures programme (GRW). By combining the universe of subsidised firms to virtually all German local banks over the period 1998-2019, we test whether this large-scale transfer programme destabilised regional credit markets. Because GRW subsidies to firms are destabilised at the EU level, we can use it as an exogenous shock to identify bank responses. On average, firm subsidies do not affect bank lending, but reduce banks’ distance to default. Average effects conflate important bank-level heterogeneity though. Conditional on various bank traits, we show that well capitalised banks with more industry experience expand lending when being exposed to subsidised firms without exhibiting more risky financial profiles. Our results thus indicate that stable banks can act as an important facilitator of regional economic development policies. Against the backdrop of pervasive transfer payments to mitigate Covid-19 losses and in light of far-reaching transformation policies required to green the economy, our study bears important implications as to whether and which banks to incorporate into the design of transfer Programmes.

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