The real effects of banks nationalization–evidence from the UK

Mariana Spatareanu, Vlad Manole and Ali Kabiri

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: How did the nationalization of UK operating banks as a result of the 2008 banking crisis impact their client firms’ performance? We use unique firm-bank data and a propensity score matching technique and find that firms that borrowed from nationalized banks show a slight decrease in the growth of investment and innovation relative to firms that borrowed from non-nationalized banks. Interestingly, we find that firms that borrowed from nationalized banks slightly increase employment, short-term debt and cash holdings. Overall, these firms were able to maintain performance as a result of policy intervention.

Keywords: bank nationalization; financial crisis; Firm performance; United Kingdom (search for similar items in EconPapers)
JEL-codes: G21 G34 O16 O30 (search for similar items in EconPapers)
Pages: 5 pages
Date: 2022-01-19
New Economics Papers: this item is included in nep-bec and nep-fdg
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Published in Applied Economics Letters, 19, January, 2022, 29(7), pp. 579 - 583. ISSN: 1350-4851

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:114478

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