Markovc, Kristjan (2025) Incentives and the Real Effects of Policy and Exogenous Shocks in Corporate Finance. [Tesi di dottorato]

Documento PDF MARKOVC_Kristjan_Doctoral_Thesis.pdf Download (4MB)

Abstract

This thesis examines how policy interventions in taxation, banking, and capital markets influence firm behavior, financial stability, and access to funding. Across three empirical chapters, it demonstrates that the effectiveness of corporate finance and macroprudential policies critically depends on their design, heterogeneity in responses, and interaction with market incentives. The first chapter evaluates gross receipts tax regime intended to reduce compliance costs for micro-firms. Average treatment effects appear small, but strong heterogeneity emerges, very small firms benefit through lower administrative burdens and higher growth, while firms near the eligibility limit experience reduced performance and long-run expansion. This reveals a central policy trade-off that may unintentionally discourage firms from growing. The second chapter investigates how public emergencies affect banking stability using the onset of COVID-19 in Hubei Province as a natural experiment. The results show that emergencies increase bank risk, primarily through heightened passive risk-taking driven by operational disruptions. However, banks with more advanced digital transformation are significantly more resilient, maintaining credit operations and mitigating risk escalation. Active, strategic risk-taking remains unaffected. These findings highlight digital infrastructure as a macroprudential instrument. Regulators should therefore promote digital transformation as a core pillar of banking resilience and emergency preparedness. The third chapter analyzes the European Central Bank's Corporate Sector Purchase Program and its impact on bond underwriting costs. Spillover effects increase costs for ineligible firms, indicating that targeted interventions can reshape market pricing more broadly. While this demonstrates the effectiveness of unconventional monetary policy in supporting corporate financing conditions, it also underscores the need to monitor distributional consequences and long-term dependencies on policy support. Together, the chapters reveal that policy tools at different levels of the financial system can effectively promote participation, stability, and financing. Yet their success hinges on accounting for heterogeneous incentives and avoiding rigid designs that impose unintended constraints. The results suggest flexible, well-coordinated policies that align firm-level incentives with macroprudential objectives, enabling growth and a more resilient financial system.

Downloads

Actions (login required)

Modifica documento