This paper analyzes the impact of reduced tax incentives for equity financing on banks' regulatory capital ratios under the Basel III regime. We are particularly interested in a recent interest rate cut in the Italian corporate equity allowance, which reduces the relative tax advantage of equity financing. The results show that banks respond to this increased tax disparity by significantly reducing their regulatory capital while at the same time reducing their risk-taking. The decline in capital is more pronounced for small banks and outweighs the initial capital gains from the introduction of this tax instrument. Our results challenge the use of equity allowances, in that financial stability gains persist only as long as costly tax subsidies remain intact and diminish as the size of the subsidy is reduced.

Arbeitsplatzzusagen stellen eine häufig genutzte industriepolitische Maßnahme dar. Die zugrundeliegende Studie evaluiert die Wirkungen von Arbeitsplatzzusagen zum Zeitpunkt der Privatisierung der Unternehmen in Ostdeutschland nach der Wiedervereinigung. Diese industriepolitische Maßnahme verlangte von den neuen Eigentümern der Unternehmen, sich zu Beschäftigungszielen zu verpflichten, wobei Strafen für Nichteinhaltung vertraglich vereinbart waren. Die Studie zeigt, dass Arbeitsplatzzusagen zu einer Polarisierung und Fehlallokation führen. Während Unternehmen mit geringer Produktivität aus dem Markt gedrängt werden, führt das industriepolitische Instrument zu Verzerrungen in der Unternehmensgröße. Um diese Verzerrungen abzubauen, haben Unternehmen einen Anreiz, in Produktivität zu investieren. Im Vergleich mit produktivitätssteigernden Subventionen zeigen sich Arbeitsplatzzusagen langfristig als weniger nachhaltig und generieren geringere Beschäftigungseffekte.

The IAB Job Vacancy Survey is a quarterly and representative establishment survey on labor demand and recruitment processes in Germany. The survey identifies the overall stock of vacancies in the German labor market, including those vacancies that are not reported to the Federal Employment Agency (FEA). The first module of the questionnaire collects information about the number and structure of vacancies, future personnel requirements, about the current economic situation and the expected development of participating establishments. The second module enquires about employer attitudes and firm use of current labor market instruments as well as the employer handling of people disadvantaged in the labor market. The third module asks for information about the last new hire and the last case of a failed recruitment effort. The Research Data Centre of the Federal Employment Agency offers the data sets of the survey waves from 2000 onwards.

We investigate whether lenders employ sustainability pricing provisions to manage borrowers’ environmental risk. Using unexpected negative environmental incidents of borrowers as exogenous shocks that reveal information on environmental risk, we find that lenders manage borrowers’ environmental risk by conventional tools such as imposing higher interest rates, utilizing financial and net worth covenants, showing reluctance to refinance, and demanding increased collateral. In contrast, the inclusion of sustainability pricing provisions in loan agreements for high environmental risk borrowers is reduced by 11 percentage points. Our study suggests that sustainability pricing provisions may not primarily serve as risk management tools but rather as instruments to attract demand from institutional investors and facilitate secondary market transactions.