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Do Asset Purchase Programmes Shape Industry Dynamics? Evidence from the ECB's SMP on Plant Entries and Exits

Sondershaus, Talina LU and Antoni, Manfred (2019) In IWH Discussion Papers
Abstract
Asset purchase programmes (APPs) may insulate banks from having to terminate relationships with unproductive customers. Using administrative plant and bank data, we test whether APPs impinge on industry dynamics in terms of plant entry and exit. Plants in Germany connected to banks with access to an APP are approximately 20% less likely to exit. In particular, unproductive plants connected to weak banks with APP access are less likely to close. Aggregate entry and exit rates in regional markets with high APP exposures are also lower. Thus, APPs seem to subdue Schumpeterian cleansing mechanisms, which may hamper factor reallocation and aggregate productivity growth.
Please use this url to cite or link to this publication:
author
and
publishing date
type
Working paper/Preprint
publication status
published
subject
keywords
plant exit, factor reallocation, asset purchase programmes, E58, G21, G28, G33
in
IWH Discussion Papers
issue
12/2019
language
English
LU publication?
no
id
0109c4f9-d314-408b-860d-28f17c976ea7
alternative location
https://www.econstor.eu/bitstream/10419/243302/1/iwh-dp2019-12rev.pdf
date added to LUP
2022-09-27 11:40:22
date last changed
2022-11-07 15:38:43
@misc{0109c4f9-d314-408b-860d-28f17c976ea7,
  abstract     = {{Asset purchase programmes (APPs) may insulate banks from having to terminate relationships with unproductive customers. Using administrative plant and bank data, we test whether APPs impinge on industry dynamics in terms of plant entry and exit. Plants in Germany connected to banks with access to an APP are approximately 20% less likely to exit. In particular, unproductive plants connected to weak banks with APP access are less likely to close. Aggregate entry and exit rates in regional markets with high APP exposures are also lower. Thus, APPs seem to subdue Schumpeterian cleansing mechanisms, which may hamper factor reallocation and aggregate productivity growth.}},
  author       = {{Sondershaus, Talina and Antoni, Manfred}},
  keywords     = {{plant exit; factor reallocation; asset purchase programmes; E58; G21; G28; G33}},
  language     = {{eng}},
  note         = {{Working Paper}},
  number       = {{12/2019}},
  series       = {{IWH Discussion Papers}},
  title        = {{Do Asset Purchase Programmes Shape Industry Dynamics? Evidence from the ECB's SMP on Plant Entries and Exits}},
  url          = {{https://www.econstor.eu/bitstream/10419/243302/1/iwh-dp2019-12rev.pdf}},
  year         = {{2019}},
}