Kazakov, Aleksandr; Koetter, Michael; Titze, Mirko; … - 2022
We study whether government subsidies can stimulate bank funding of marginal investment projects and the associated … 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 …