The real effects of banks nationalization – evidence from the UK

Mariana Spatareanu, Vlad Manole and Ali Kabiri

Applied Economics Letters, 2022, vol. 29, issue 7, 579-583

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.

Date: 2022
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DOI: 10.1080/13504851.2021.1876206

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