Targeted asset purchases and business dynamism

49 Pages Posted: 19 Jan 2023 Last revised: 9 Jan 2024

See all articles by Manfred Antoni

Manfred Antoni

Institute for Employment Research (IAB)

Talina Sondershaus

Lund University School of Economics and Management

Abstract

Do targeted asset purchases alter business dynamism of SMEs and their plants? We find that plants linked to banks that were exposed to the first targeted asset purchases by the ECB are approximately 20\% less likely to exit. The effect varies depending on the capitalization of banks and productivity of firms. We study entry dynamism by aggregating half of the population of German plants and observe lower entry rates for high exposed regions. Meanwhile, unemployment rates are lower. Our findings can shed light on potential side effects of a crisis tool implemented by the ECB to prevent a resurgence of the European sovereign debt crisis while interest rates are rising.

Keywords: SMEs, plants, market exits and entries, asset purchases, Securities Market Program (SMP), crisis instruments, Transmission Protection Instrument (TPI)

JEL Classification: E58, G21, G28, G33

Suggested Citation

Antoni, Manfred and Sondershaus, Talina, Targeted asset purchases and business dynamism. Available at SSRN: https://ssrn.com/abstract=4329841 or http://dx.doi.org/10.2139/ssrn.4329841

Manfred Antoni

Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

Talina Sondershaus (Contact Author)

Lund University School of Economics and Management ( email )

Lund

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