Take it to the (public) bank: The efficiency of public bank loans to private firms

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Anders Kärnä
Keyword(s):  
Economic Growth ◽  
Capital Markets ◽  
Firm Growth ◽  
Bank Loans ◽  
Government Interventions ◽  
The Public ◽  
Positive Effects ◽  
Economic Output ◽  
Unique Dataset

AbstractIncomplete capital markets and credit constraints for small and medium-sized enterprises (SMEs) are often considered obstacles to economic growth, thus motivating government interventions in capital markets. While such policies are common, it is less clear to what extent these interventions result in firm growth or to which firms interventions should be targeted. Using a unique dataset with information about state bank loans targeting credit-constrained SMEs in Sweden with and without complementary private bank loans, this paper contributes to the literature by studying how these loans affect the targeted firms for several outcome variables. The results suggest that the loans create a one-off increase in investments, with long-term, positive effects for sales and labor productivity but only for firms with 10 or fewer employees. Increased access to capital by firms can therefore produce increases in economic output but only in a specific type of firm. This insight is of key importance in designing policy if the aim is to increase economic growth.

Take it to the (public) bank: The efficiency of public bank loans to private firms

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Anders Kärnä
Keyword(s):  
Economic Growth ◽  
Capital Markets ◽  
Firm Growth ◽  
Bank Loans ◽  
Government Interventions ◽  
The Public ◽  
Positive Effects ◽  
Economic Output ◽  
Unique Dataset

Abstract Incomplete capital markets and credit constraints for small and medium-sized enterprises (SMEs) are often considered obstacles to economic growth, thus motivating government interventions in capital markets. While such policies are common, it is less clear to what extent these interventions result in firm growth or to which firms interventions should be targeted. Using a unique dataset with information about state bank loans targeting credit-constrained SMEs in Sweden with and without complementary private bank loans, this paper contributes to the literature by studying how these loans affect the targeted firms for several outcome variables. The results suggest that the loans create a one-off increase in investments, with long-term, positive effects for sales and labor productivity but only for firms with 10 or fewer employees. Increased access to capital by firms can therefore produce increases in economic output but only in a specific type of firm. This insight is of key importance in designing policy if the aim is to increase economic growth.

scholarly journals The Relationships between Military Expenditures and Unemployment in G-20 States

2016 ◽  
Author(s):  
Ahmet Fatih Aydemir ◽  
Dilek Özdemir ◽  
Ömer Selçuk Emsen
Keyword(s):  
Economic Growth ◽  
Military Spending ◽  
Military Expenditure ◽  
Negative Effects ◽  
The Public ◽  
Developed Economies ◽  
Positive Effects ◽  
Military Expenditures ◽  
Liberal Approach ◽  
The Military

The effects of the military expenditure on the economic growth and consequently on the employment has been the primary topic of the discussing in the literature of economics. Considering that the military expenditures generally emerge as a sub-item of the public spending, it has been asserted by the liberal approach that the principle of the non-productiveness of the public sector would be even more applicable in the military expenditures. None the less, using the military spending as a tool to lead an economy that feature underemployment constitutes the positive aspect of the views to the military expenditure and this is also the case of the prediction of the Keynesian economy. In this study, the effects of the military expenditure on the unemployment, which is a reflection of the effects of the economic growth, are analyzed as the subject matter. The findings revealed that the military spending has positive effects on the unemployment in some G20 states while it also has negative effects in some and has neutral effects in others. In addition, it is further indicated that the positive effects are experienced in relatively advanced economies, the negative effects emerge in relatively less developed economies, and the countries with abundant natural resources experience neutral effects.

scholarly journals Imbalance of the public finance in the context of Keynesian and Non-Keynesian effects of fiscal policy limitation

2017 ◽  
Vol 3 (3) ◽  
pp. 27-32
Author(s):  
Joanna Stawska
Keyword(s):  
Public Finance ◽  
Economic Growth ◽  
Fiscal Policy ◽  
Public Debt ◽  
Statistical Data ◽  
Gdp Growth ◽  
The Public ◽  
Methods Of Analysis ◽  
Restrictive Policy

The purpose of this article is to point out the importance of the size of public debt and deficit in the context of Keynesian and non-Keynesian effects of fiscal policy limitation. To achieve this objective primarily were used methods of analysis of the available literature and presentation of statistical data. Considerations include, among others, the presentation of public debt and deficit in the context of economic growth. Expansionary fiscal policy often caused by economic fluctuations contributes to the deepening of public finance imbalance with frequent decline in GDP growth. The restrictive policy has an influence on improving the situation of the public finance sector in the long-term with at least moderate economic growth.

scholarly journals Economic Growth and the Public Sector: A Comparison of Canada and Italy, 1870-2013

2018 ◽  
Vol 10 (3) ◽  
pp. 221-243
Author(s):  
Livio Di Matteo ◽  
Thomas Barbiero
Keyword(s):  
Economic Growth ◽  
Public Sector ◽  
Economic Performance ◽  
Government Spending ◽  
Central Government ◽  
Government Size ◽  
Size Of Government ◽  
The Public ◽  
Economic Stagnation

There is considerable evidence that the size of the public sector can influence an economy’s rate of economic growth. We investigate public sector spending of central governments and economic performance in two G7 countries over the long-term, Canada and Italy. Their economic performance has diverged in the last 25 years and it is worth investigating whether the size of government was a contributing factor. We find that in both the case of Canada and Italy the size of central government spending directly affects the performance of their economies in an inverse U-shaped relationship known as a Scully/BARS Curve. These results suggest that along with modifying current central government size, other levels of governments may need to shrink their own spending. The fact that the amount spent by government on pensions as a percentage of GDP in Italy is nearly 4 times that in Canada may partly explain the higher level of Italy’s public debt as well as an indirect contributing factor to economic stagnation in the last 25 years.

Capital Markets Union

2018 ◽  
Author(s):  
Erik PM Vermeulen
Keyword(s):  
Economic Growth ◽  
Capital Markets ◽  
Lower Cost ◽  
Access To Finance ◽  
Start Up ◽  
Capital Markets Union ◽  
Successful Innovation ◽  
Start Ups ◽  
The Eu

The Capital Markets Union (CMU) aims to strengthen capital markets and investments in the EU. The rationale behind such a union is that it is necessary to provide businesses, particularly start-up companies, with a greater choice of funding at lower cost. More generally, it is assumed that, in the long-term, greater choice increases access to finance and fosters economic growth. This chapter argues that although the CMU may be a necessary step, it has to be situated in a much broader discussion about how to create successful innovation ecosystems. Such an approach highlights the sector-specific needs of start-ups (and scale-ups) and the importance of mobilizing other players, particularly established corporations.

Impact of Public Health Equalization on Residents’ Health and Economic Growth: An Empirical Analysis from Jiangsu Province (2006–2015), China

2021 ◽  
pp. 1-22
Author(s):  
Zhengyang Chen ◽  
Xinglong Xu ◽  
Dongfu Qian ◽  
Xiang Zhan
Keyword(s):  
Public Health ◽  
Economic Growth ◽  
Healthcare Delivery ◽  
Term Effect ◽  
Jiangsu Province ◽  
Short Term ◽  
Step Method ◽  
Financial Investment ◽  
The Public

Abstract Public health equalization has a significant impact on residents’ health and economic growth. Recently, studies suggested the persistence of series of public health unequal issues in China, such as imbalanced government financial investment, unreasonable configuration of public health resources, etc. The healthcare system in Jiangsu province is a microcosm of the pattern of healthcare delivery in China. Identifying developmental differences in Jiangsu and consequential effect on healthcare output can serve as a good reference for comparing performance of healthcare facilities within China in general. Based on the Model of Health the Healthy Production from Grossman and Lucas’ New Endogenous Economic Growth Model, we selected data from China Statistical Yearbooks and Jiangsu Statistical Yearbooks. 13 cities in Jiangsu province were divided into three groups, categorized as economically developed areas, relatively economically developed areas and less-economically developed areas. The panel cointegration model and e PVECM PVECM error correction model based on E-G two-step method are utilized for empirical research. During the period of 2006–2015, there were differences between the short term effect and long term effect on regional development resulted by the public health equalization level of Jiangsu Province. In the short term, the healthcare investment equalization level has been improved, to a certain extent, which executes a certain promoting effect on the people’s health development and regional economic growth in the long term, which restraint the improvement and development of long term public health equalization level and stimulating on the residents’ health and economic growth. The government of China in general and Jiangsu province in particular could ensure the efficiency of public health human resources, reform the public hospital internal system and establish an effective competition system, aiming to improve the public health equalization and promote balanced development of residents’ health and economic growth.

Von der Tulpenkrise zum Finanzmarktkollaps. Das Allgemeine im Besonderen

2011 ◽  
Vol 52 (1) ◽  
Author(s):  
Toni Pierenkemper
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
General Pattern ◽  
Efficient Market Hypothesis ◽  
Dynamic Processes ◽  
Negative Effects ◽  
Positive Effects ◽  
Starting Point ◽  
Shed Light

AbstractContrary to the presumed perfect markets of the Efficient Market Hypothesis, the very concept of which seems logically flawed, numerous economic crises have been observed in the economic development of the last four hundred years. The following paper seeks to shed light on a specific type of crisis the speculative crisis and in particular its general pattern, from its starting point as an innovative business idea, to Boom and Crash, to exploring consequences, making use of examples from selected historical crises. This paper also seeks to demonstrate that speculations of this sort were also often associated with long term positive effects on economic growth. A complete prevention of dynamic processes of this sort, therefore, by means of comprehensive regulation, appears not only illusory, but also anti-progressive, although measures to limit the negative effects of crises as far as possible must, of course, be taken.

scholarly journals Does debt predict growth? An empirical analysis of the relationship between total debt and economic output

2015 ◽  
Vol 4 (2) ◽  
pp. 79 ◽  
Author(s):  
Willem Vanlaer ◽  
Wim Marneffe ◽  
Lode Vereeck ◽  
Johan Vanovertveldt
Keyword(s):  
Economic Growth ◽  
Global Financial Crisis ◽  
Developed Countries ◽  
Short Term ◽  
Debt Accumulation ◽  
Economic Output ◽  
Total Level ◽  
Private Credit ◽  
The Impact

Although the recent global financial crisis has stimulated a vast amount of research on the impact of public debt on economic growth and also increasingly on the role of private credit, the total levels of indebtedness of an economy have largely been ignored. This paper studies the impact of the total level of and increases in debt-to-GDP on economic growth for 26 developed countries in the short, medium and longer term. We analyse whether we can predict the future level of growth, simply by looking at the total level of debt, or increases in that debt level. We find that there is a negative correlation between high levels of debt and short term economic growth, but that this effect tapers in the medium and long term. Similarly, we find that rapid debt accumulation is negatively related to economic growth over the short term, the impact is less pronounced over the medium term and is non-existent over the long term.

scholarly journals Analysis of Ziswaf, Production Index and Sharia Stock Index on Economic Growth

2019 ◽  
Vol 1 (2) ◽  
pp. 221-242
Author(s):  
Purbawati Setyaningsih ◽  
Roikhan Mochamad Aziz ◽  
Puji Hadiyati
Keyword(s):  
Economic Growth ◽  
Stock Index ◽  
Economic Activities ◽  
Negative Effects ◽  
Short Term ◽  
Production Index ◽  
Positive Effects ◽  
Term Model ◽  
Long Run

This study analyzes the influence ZISWAF, Gini ratio, the total export value, the index of industrial production, sharia stock index investment to GDP growth, in the short and long term. Qualitative data were taken from BPS, Baznas, ACT Global Waqf, the FSA from March 2006 until December 2017 using the methodology of The Error Correction Model (ECM). The results of this study indicate that the variable Gini Ratio, Ziswaf, Total exports, Production Index and Sharia Stock Index on GDP economic growth have significant and positive effects in the long term and the short term. Meaning that these variables have a relationship with GDP economic growth. If the variable decreases or slows down-then GDP economic growth also. While total exports have insignificant effects and negative effects on GDP economic growth. The R-square regression value of the long-term model produces a proportion of 96 percent, the short-term model produces a proportion of 97 percent. Both in the long-run and short-run models, the highest coefficient value is the value of the Gini ratio with 4.941522 and 0.348043. All positive coefficients, Gini ratio variables, ziswaf and production index have a significant effect on gdp, total exports and sharia stock indexes do not have a significant effect on gdp both in the long and short-term models. It implies in the future, fiscal economic policy makers to economic growth that opened a lot of employment, by encouraging resource based economic activities of Indonesia's largest export-oriented agriculture and mining. Good Corporate goverment should do so gini ratio of the areas surrounding the economy improved and people kesejahtaeraan increase.

scholarly journals The impacts of public investment on private investment and economic growth

2018 ◽  
Vol 25 (1) ◽  
pp. 15-32 ◽  
Author(s):  
Canh Thi Nguyen ◽  
Lua Thi Trinh
Keyword(s):  
Economic Growth ◽  
Public Investment ◽  
Private Investment ◽  
Short Term ◽  
Content Type ◽  
State Sector ◽  
Positive Effects ◽  
Long Run ◽  
Short And Long Term

Purpose The purpose of this paper is to assess both short and long-term influences of public investment on economic growth and test the hypothesis that whether public investment promotes or demotes private investment in Vietnam. Design/methodology/approach The authors use the approach of autoregressive distributed lag model and Vietnam’s macro data in the period of 1990-2016, to evaluate the short and long-term effects of public investment on economic growth and private investment. The model evaluates the impact of public investment on economic growth and private investment based on the neoclassical theories. The public investment which strongly affects economic growth is also reflected by aggregate supply and demand. Public investment directly impacts aggregate demand as a government expenditure and aggregate supply as a production function (capital factor). Findings The results from this research indicate that public investment in Vietnam in the past period does affect economic growth in the pattern of an inverted-U shape as of Barro (1990), with positive effects mostly occurring from the second year and negative effects of constraining long-term growth. Meanwhile, investment from the private sector, state-owned enterprises, and FDI has positive effects on short-term economic growth and state-owned capital stock has positive impacts on economic growth in both the short and long run. The estimated influence of public investment on private investment also shows a similar inverted-U shape in which public investment have crowding-in private investment short-term but crowding-out in the long run. Practical implications The empirical findings in this study can be used for conducting a more efficient policy in restructuring the state sector investment in Vietnam. Originality/value The main contributions in this study are: to evaluate the impacts of public investment on economic growth and private investment, the authors extracted public investment in infrastructure from aggregate investment of state sector (as previous studies used); the authors also uses state-owned capital stock variable including cumulative public investment and state-owned enterprises investment suggesting that this could control for the different orders of integration between the stock and flow variable and improve the experimental characteristics of the equation to a higher degree.

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