Social Capital and Regional Innovation: Evidence from Private Firms in the US
Iftekhar Hasan, Nada Kobeissi, Bo Wang, Haizhi Wang, Desheng Yin
Regional Studies,
forthcoming
Abstract
In this study we investigate whether and to what extent social capital may affect regional innovation by focusing on private firms in the United States. We document that regional social capital is positively associated with the quantity, quality and novelty of county-level innovation by private firms. In addition, we find that the positive relation between social capital and regional innovation is more prominent in counties with a lower supply of financial capital. We also report that social capital is complementary to investments in research and development to produce inventive outcomes in local areas. Using a spatial Durbin model, we provide evidence that regional social capital has significant spillover effects in boosting the innovation activities of neighbouring counties.
Read article
30.11.2022 • 28/2022
Stricter rules for banks can relieve real estate markets
Exuberant price levels in the German real estate market could further exacerbate an economic crisis. Fiscal instruments exert too little influence to contain this danger, shows a study by the Halle Institute for Economic Research (IWH).
Michael Koetter
Read press release
Firm Subsidies, Financial Intermediation, and Bank Stability
Aleksandr Kazakov, Michael Koetter, Mirko Titze, Lena Tonzer
IWH Discussion Papers,
No. 24,
2022
Abstract
We use granular project-level information for the largest regional economic development program in German history to study whether government subsidies to firms affect the quantity and quality of bank lending. We combine the universe of recipient firms under the Improvement of Regional Economic Structures program (GRW) with their local banks during 1998-2019. The modalities of GRW subsidies to firms are determined at the EU level. Therefore, we use it to identify bank outcomes. Banks with relationships to more subsidized firms exhibit higher lending volumes without any significant differences in bank stability. Subsidized firms, in turn, borrow more indicating that banks facilitate regional economic development policies.
Read article
Kommentar: Die Schuldenfinanzierung höherer Militärausgaben ist Augenwischerei
Oliver Holtemöller
Wirtschaft im Wandel,
No. 1,
2022
Abstract
Die Bundesregierung will zusätzliche Militärausgaben in Höhe von 100 Mrd. Euro über ein „Sondervermögen“ finanzieren. Dies täuscht darüber hinweg, dass mehr Militärausgaben nicht ohne Einschränkungen an anderer Stelle, z. B. bei Investitionen für den Klimaschutz, zu haben sind. Eine Finanzierung über höhere Steuern wäre transparenter und würde die wirtschaftliche Leistungsfähigkeit des Einzelnen berücksichtigen.
Read article
Stress-ridden Finance and Growth Losses: Does Financial Development Break the Link?
Serafín Martínez-Jaramillo, Ricardo Montañez-Enríquez, Matias Ossandon Busch, Manuel Ramos-Francia, Anahí Rodríguez-Martínez, José Manuel Sánchez-Martínez
IWH Discussion Papers,
No. 3,
2022
Abstract
Does financial development shield countries from the pass-through of financial shocks to real outcomes? We evaluate this question by characterising the probability density of expected GDP growth conditional on financial stability indicators in a panel of 28 countries. Our robust results unveil a non-linear nexus between financial stability and expected GDP growth, depending on countries’ degree of financial development. While both domestic and global financial factors affect expected growth, the effect of global factors is moderated by financial development. This result highlights a previously unexplored channel trough which financial development can break the link between financial (in)stability and GDP growth.
Read article
Firm Subsidies, Financial Intermediation, and Bank Risk
Aleksandr Kazakov, Michael Koetter, Mirko Titze, Lena Tonzer
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.
Read article
Protecting Our People and Economy in the Long Term
Kai Konrad, Mareike Kunter, Lena Tonzer
Covid-19 Lessons Learned - Preparing for Future Pandemics. Spanish National Research Council,
2021
Abstract
While taking measures to prevent the infection was an acute necessity, the impact on other areas of life should always be considered, both, in the short- and long term. The pandemic and the mitigation measures have directly or indirectly affected people’s well-being, their general health, education or the economy. In order to learn for the future, it is of utmost importance to monitor and understand these side effects, in particular regarding long-term developments.
Read article
Homepage
Stricter rules for banks can relieve real estate markets Exuberant price levels in the German real estate market could...
See page
IWH European Real Estate Index
IWH European Real Estate Index The IWH European Real Estate Database is a new data...
See page
Speed Projects
Speed Projects On this page, you will find the IWH EXplore Speed Projects in...
See page
