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Annalisa Ferrando

Monetary Policy

Division
咪乐|互动|直播|平台 为具有融资业务需求的文化企业提供了未来业务指引及参考依据。

Capital Markets/Financial Structure

Current Position

Senior Lead Economist

Fields of interest

Microeconomics,Financial Economics,Law and Economics

Email

annalisa.ferrando@ecb.europa.eu

Education
1988-1990

M.Phil. in Economics, University of Oxford, UK

1987-1988

Diploma in Economia e Gestione Aziendale, Scuola Superiore E. Mattei, Milan, Italy

1981-1987

Degree in Economics, University of Venice, Venice, Italy

Professional experience
2006-2018

ECB, Principal Economist, Directorate Monetary Policy

2017

EIB, nov. 2016- oct. 2017, Advisor on secondment, Economics Department

2000-2006

ECB, Senior Economist, Directorate Monetary Policy

2001-2002

ECB, Consultant on the project "Bank lending survey in the EMU"

1998-2000

European Commission, National Expert, Direction General Enterprise

1991-1997

Banca d' Italia, Economist, Research Department

Awards
2021

2021 New Zealand Association of Economists. meeting: Stata Prize for Excellence in Graphics Communications. Paper title: "Monetary policy, investment and firm heterogeneity"

2019

2019 Behavioural Finance Working Group Conference: Best Quantitative Paper Award sponsored by Review of Behavioral Finance. Paper title: "What were they thinking? Firms' expectations on the availability of external finance"

2018

World Finance and Banking Symposium 2018: Best Paper Award. Paper title: “Investment of financially distressed firms: the role of trade credit”

2018

European Financial Management : 2017 Readers' Choice Best Paper Award. Paper title: “Financial Flexibility and investment ability across the euro area and the UK”

Teaching experience
1990

Lecturer in Economics, St. Peter's College, Oxford University, October 1990- March 1991

6 October 2021
WORKING PAPER SERIES - No. 2598
Details
Abstract
We study the transmission of (unconventional) monetary policy to the real sector when firm decisions depend on both current and future credit market conditions. For a given level of current credit access, investment and employment increases more at firms expecting bank credit to improve in the future. Three separate unconventional policies by the ECB—the OMT, the introduction of negative rates, and the CSPP—improved expectations of future credit access for SMEs borrowing from banks that were expected to increase SME lending due to the policy. Our results enhance our understanding of the bank balance sheet channel of monetary policy.
JEL Code
D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
D84 : Microeconomics→Information, Knowledge, and Uncertainty→Expectations, Speculations
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
H63 : Public Economics→National Budget, Deficit, and Debt→Debt, Debt Management, Sovereign Debt
21 September 2021
OCCASIONAL PAPER SERIES - No. 270
Details
Abstract
The financing structure of the euro area economy has evolved since the global financial crisis with non-bank financial intermediation taking a more prominent role. This shift affects the transmission of monetary policy. Compared with banks, non-bank financial intermediaries are more responsive to monetary policy measures that influence longer-term interest rates, such as asset purchases. The increasing role of debt securities in the financing structure of firms also leads to a stronger transmission of long-rate shocks. At the same time, short-term policy rates remain an effective tool to steer economic outcomes in the euro area, which is still highly reliant on bank loans. Amid a low interest rate environment, the growth of market-based finance has been accompanied by increased credit, liquidity and duration risk in the non-bank sector. Interconnections in the financial system can amplify contagion and impair the smooth transmission of monetary policy in periods of market distress. The growing importance of non-bank financial intermediaries has implications for the functioning of financial market segments relevant for monetary policy transmission, in particular the money markets and the bond markets.
JEL Code
E4 : Macroeconomics and Monetary Economics→Money and Interest Rates
E5 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit
G2 : Financial Economics→Financial Institutions and Services
G38 : Financial Economics→Corporate Finance and Governance→Government Policy and Regulation
23 June 2021
ECONOMIC BULLETIN - BOX
Economic Bulletin Issue 4, 2021
Details
Abstract
European governments responded to the pandemic by deploying large fiscal packages with the aim of supporting households, workers and firms. The October 2020-March 2021 SAFE shows that around two-thirds of large firms and SMEs surveyed made use of government policy support measures. Most firms used these schemes, particularly in the form of wage support measures, tax cuts and tax moratoria, to cover their immediate and short-term liquidity needs. Firms also indicated that government measures either currently in place or planned would make it easier for them to meet their debt obligations in the next two years. This demonstrates how government policies have been key to easing the liquidity needs of firms in the short and medium term following the outbreak of the pandemic.
JEL Code
D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
H32 : Public Economics→Fiscal Policies and Behavior of Economic Agents→Firm
25 November 2020
RESEARCH BULLETIN - No. 77
Details
Abstract
We set out to analyse the monetary policy transmission mechanism by documenting how the annual investment of more than one million firms in Germany, Spain, France and Italy responded to monetary policy shocks between 2000 and 2016. We show that euro area firms react differently depending on their age and the industry they operate in: young firms and those producing durable goods react more strongly than the average firm. This confirms that monetary policy is affecting firms’ investment through two different channels. On the one hand, the “interest rate channel” affects demand for durable goods more than demand for services, which in turn affects investment demand from the producers of those goods. On the other hand, as young firms are more likely to face financing constraints, their stronger than average reaction can be explained by the “balance sheet channel” of monetary policy transmission.
JEL Code
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
20 July 2020
WORKING PAPER SERIES - No. 2446
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Abstract
This paper provides novel information on the propagation of the pandemic-induced real shock to firms’ financial conditions. It uses firm-level survey data from end February to early April 2020 for a large sample of euro area SMEs and large firms. Firms’ expectations on the availability of credit lines, bank loans and trade credit deteriorated significantly in the first half of March. Firms mostly expected to be affected if they had previously difficulties in securing finance, had higher indebtedness and, hence, less capacity to deal with a liquidity shock. Conditional on these factors, firm size does not seem to matter, except for trade credit, in which case SMEs had more positive conditional expectations. Together with the overall deterioration of expectations, there seems to have also been a reallocation of opportunities to access finance amidst the crisis. Small firms were more likely to have conditional expectations of improvement in their access to finance.
JEL Code
C83 : Mathematical and Quantitative Methods→Data Collection and Data Estimation Methodology, Computer Programs→Survey Methods, Sampling Methods
D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
D84 : Microeconomics→Information, Knowledge, and Uncertainty→Expectations, Speculations
E65 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Studies of Particular Policy Episodes
L25 : Industrial Organization→Firm Objectives, Organization, and Behavior→Firm Performance: Size, Diversification, and Scope
17 June 2020
ECONOMIC BULLETIN - BOX
Economic Bulletin Issue 4, 2020
Details
Abstract
This box presents evidence on the impact of the coronavirus (COVID-19) crisis among small and medium-sized enterprises (SMEs) based on the results of the 22nd round of the Survey on the Access to Finance of Enterprises (SAFE).
JEL Code
D22, E58, G32 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
16 June 2020
ECONOMIC BULLETIN - ARTICLE
Economic Bulletin Issue 4, 2020
Details
Abstract
Using information derived from the survey on the access to finance of enterprises (SAFE), this article provides an overview of the changes in the financing conditions experienced by euro area companies over the last ten years. The focus is on non-financial small and medium-sized enterprises (SMEs). Following the Global Financial Crisis and during the subsequent euro area sovereign debt crisis, access to external finance for these firms was severely impaired. This was followed by a steady improvement in financial conditions, particularly due to support from the accommodative monetary policy measures introduced since 2012. Despite a gradual improvement since the mid-2010s, challenges for SMEs’ access to finance remained, for example in terms of funding diversification, even before the coronavirus (COVID-19) crisis started at the end of 2019. The outbreak of the recent pandemic raised some new, severe and immediate challenges for SMEs in terms of their access to financing. An accompanying box in this issue of the Economic Bulletin summarises the results of the latest SAFE survey, which took place in March and April 2020, in the midst of the coronavirus crisis.
JEL Code
D22, E58, G32 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
15 June 2020
WORKING PAPER SERIES - No. 2420
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Abstract
We propose a new methodology to recover firm-time varying financial constraints from firms’ production behavior. We model financial constraints as the profitability that firms forgo when budget constraints on production inputs bind, impeding them from using the optimal level of inputs and technology. We estimate and validate our measure using unique data combining firms’ balance sheets with survey information on self-reported financial constraints, like loan rejections. In contrast to three popular indices of financial constraints, our measure recovers financial constraints beyond observable firm characteristics, recovers cross-sectional and time-varying stylized facts of financial constraints, and is applicable to both public and private firms.
JEL Code
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
G00 : Financial Economics→General→General
G30 : Financial Economics→Corporate Finance and Governance→General
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
12 June 2020
WORKING PAPER SERIES - No. 2419
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Abstract
This paper aims at investigating the relationship between firms’ profit efficiency, access to finance and innovation activities. We enrich our understanding on firms’ performance by adopting the stochastic frontier approach (SFA), which allows us to estimate profit functions and to obtain efficiency scores for a large sample of European firms. We pioneer the use of a novel dataset that merges survey-based data derived from the ECB Survey on access to finance for enterprises (SAFE) with balance sheet information. Our evidence documents that credit constrained firms display an incentive to improve their efficiency in order to increase profitability. Among firms that have embarked in product innovation, those in the industry and high-tech sectors see their effort translated in higher profit efficiency. From a policy perspective, our results could help to better understand the link between innovation, financial constraints and efficiency, which goes beyond the idea that easier access to finance is the panacea to get higher profit efficiency.
JEL Code
D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
D24 : Microeconomics→Production and Organizations→Production, Cost, Capital, Capital, Total Factor, and Multifactor Productivity, Capacity
L23 : Industrial Organization→Firm Objectives, Organization, and Behavior→Organization of Production
O31 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights→Innovation and Invention: Processes and Incentives
C33 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Panel Data Models, Spatio-temporal Models
7 April 2020
WORKING PAPER SERIES - No. 2390
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Abstract
This paper provides new evidence on the channels of monetary policy transmission combining 9 million observations on firm level investment and high-frequency identified monetary policy shocks. We show that the reaction of firms’ investment to a monetary policy shock is heterogeneous along dimensions that correspond to the two main channels of monetary policy transmission. First, we show that young firms are more sensitive to monetary policy shocks, supporting the existence of a credit channel of monetary policy. Second, we document large cross-sectional heterogeneity related to the industry the firm operates in. We find that firms producing durable goods react more than others, which is consistent with traditional interest rate channel effects of monetary policy. Third, we find that the effect of monetary policy shocks is longer lived for firms that are durable goods producers than for young firms indicating that demand effects last longer than credit effects.
JEL Code
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
27 December 2019
ECONOMIC BULLETIN - BOX
Economic Bulletin Issue 8, 2019
Details
Abstract
This box reports the responses to an ad hoc question in the latest Survey on the Access to Finance of Enterprises (SAFE) regarding the export activities of euro area small and medium-sized enterprises (SMEs). In general, just over a third of euro area SMEs exported goods or services outside their domestic market. About half of those exported outside Europe, of which 60% to North America and 40% to China. Comparing sectors, export activities seem to be quite strong among SMEs in the industrial sector, followed by trade and services, but more limited in construction. Exporters, particularly those exporting outside Europe, tend to have a strong equity base and use trade credit. They also make more use of subsidised loans and tend to be more innovative.
JEL Code
E24 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital
16 December 2019
WORKING PAPER SERIES - No. 2341
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Abstract
Using a large set of firm-level survey data from the euro area since 2009, we analyse how firms use their information to form expectations on the availability of bank finance. Our results suggest that firms update what otherwise look like adaptive expectations on the basis of the latest information in their information set. As in the previous literature, the hypothesis that expectations fulfil the (orthogonality) conditions of the rational expectations hypothesis is rejected by the data. We find evidence that this is not only due to information imperfections but also to some type of misspecification of the expectations’ model that firms are using. In addition, we find some evidence that companies that have not used bank finance recently tend to do worse at forecasting its availability next period. To test how policy announcements may affect expectations, we concentrate on the possible effects of the ECB policy announcements of summer 2012, which included among other things the announcement of the European Central Bank’s Outright Monetary Transactions Program (OMT). Using a difference-in-differences approach, we find evidence of forward-looking expectations. In particular, shortly after the OMT announcement the forecast of “informed” firms were more upbeat compared to the control group of firms. This moreover was true in both vulnerable and non-vulnerable countries, suggesting that it was the relevance of the information about the future of the banking system that most mattered for expectations at the time, more than the immediate impact of the announced policy measures.
JEL Code
C83 : Mathematical and Quantitative Methods→Data Collection and Data Estimation Methodology, Computer Programs→Survey Methods, Sampling Methods
D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
D84 : Microeconomics→Information, Knowledge, and Uncertainty→Expectations, Speculations
17 May 2017
WORKING PAPER SERIES - No. 2063
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Abstract
We investigate the impact of employment protection on firms credit access by looking at both credit obtained from banks and firms’ decision to apply for a loan. We find that greater flexibility in structuring the employees’ working hours and in dismissing employees increases the probability that firms obtain credit and that greater flexibility in dismissing employees decreases the probability that firms are discouraged from applying for credit. However, our findings also reveal that firms perceive regulations providing flexibility with regard to the employees’ working hours differently from banks, leading to a situation in which firms are more likely to be discouraged from applying for a loan, even though the probability to obtain a loan increases. Our results are robust to confounding, endogeneity, selection bias as well as to alternative specifications.
JEL Code
D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
J41 : Labor and Demographic Economics→Particular Labor Markets→Labor Contracts
28 January 2016
OCCASIONAL PAPER SERIES - No. 167
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Abstract
Although monetary union created the conditions for improving economic and financial integration in the euro area, in the context of the financial and sovereign crises, it has also been accompanied by the emergence of severe imbalances in savings and investment, credit and housing booms in some countries and the allocation of resources towards less productive sectors. The global financial crisis and the euro area sovereign debt crisis then led to major and abrupt adjustments as the risks posed by the large imbalances materialised. Although the institutional shortcomings in the EU that permitted the emergence of imbalances have been largely addressed since 2008, the adjustment process is not yet complete. From a macroeconomic perspective, the imbalances in the external accounts have led to the accumulation of high levels of external liabilities that need to be reduced, which, in turn, is weakening investment and therefore weighing on growth prospects and growth potential. From a macroprudential perspective, the lingering imbalances have added to systemic risk and rendered the euro area more vulnerable to risks. This Occasional Paper analyses the dynamic patterns in macroeconomic imbalances primarily from the former perspective, addressing in particular the connections between macroeconomic and sectoral adjustments of imbalances and the challenges for economic growth and performance over a longer horizon.
JEL Code
E21 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Consumption, Saving, Wealth
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
F32 : International Economics→International Finance→Current Account Adjustment, Short-Term Capital Movements
F41 : International Economics→Macroeconomic Aspects of International Trade and Finance→Open Economy Macroeconomics
24 August 2015
WORKING PAPER SERIES - No. 1842
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Abstract
This paper uses a new survey-based data set and a model with strong theoretical under-pinnings to explain the characteristics and behaviour of discouraged borrowers in the euro area. The results show that more borrowers are discouraged when the average interest rate charged by banks in a country is higher. Higher corporate tax rates, on the other hand, lead to lower discouragement. We show that discouragement has strong negative effects on in- vestment growth (-4.7pp), employment growth (-2.7pp) and asset growth (-2.9pp) due to the lack of access to bank finance in the two years following the discouragement. Furthermore, we estimate that the majority of discouraged borrowers would be unable to get a loan if they would apply. Consistent with this low loan approval likelihood, discouraged borrowers tend to be relatively risky firms.
JEL Code
G01 : Financial Economics→General→Financial Crises
G10 : Financial Economics→General Financial Markets→General
G30 : Financial Economics→Corporate Finance and Governance→General
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
6 August 2015
WORKING PAPER SERIES - No. 1836
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Abstract
This paper provides an encompassing description of the various indicators compiled in the financial module of CompNet using balance sheet information of European firms. We investigate whether and to which extent the heterogeneous financial positions of firms have affected firms
JEL Code
D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
D24 : Microeconomics→Production and Organizations→Production, Cost, Capital, Capital, Total Factor, and Multifactor Productivity, Capacity
D92 : Microeconomics→Intertemporal Choice→Intertemporal Firm Choice, Investment, Capacity, and Financing
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
13 July 2015
WORKING PAPER SERIES - No. 1829
Details
Abstract
We investigate the role of the judicial system on whether or not the firms obtain the credit they applied for, by looking at the strength of the creditor protection, the strength of property rights, the time for resolving a dispute, its costs and the number of procedures the plaintiff faces. We use data about 48,590 firms from eleven countries collected via the Survey on the Access to Finance of Enterprises (European Central Bank) and data from the World Bank, the Heritage Foundation and Eurostat. The results suggest that the better the judicial enforcement system is (reduced costs, reduced time, and limited number of procedures) and the higher the creditor protection is (high overall strength of the legal system, high property rights protection), the lower the probability that the firms are credit constrained. Our results are robust to selection bias (Heckman selection) as well as different controls and different estimation techniques. More importantly, we find that these variables have considerable economic impact: the probability to obtain credit is up to 40% higher in countries with a better legal system.
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
K41 : Law and Economics→Legal Procedure, the Legal System, and Illegal Behavior→Litigation Process
7 July 2015
WORKING PAPER SERIES - No. 1823
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Abstract
In this paper we consider the relation between firms
JEL Code
D24 : Microeconomics→Production and Organizations→Production, Cost, Capital, Capital, Total Factor, and Multifactor Productivity, Capacity
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
O16 : Economic Development, Technological Change, and Growth→Economic Development→Financial Markets, Saving and Capital Investment, Corporate Finance and Governance
26 June 2015
WORKING PAPER SERIES - No. 1820
Details
Abstract
We investigate the effect of sovereign stress and of unconventional monetary policy on small firms
JEL Code
D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
H63 : Public Economics→National Budget, Deficit, and Debt→Debt, Debt Management, Sovereign Debt
29 January 2014
WORKING PAPER SERIES - No. 1630
Details
Abstract
We use a large database of more than 685,000 European firms to show that financial flexibility attained through conservative leverage policies is more important for private, small, medium-sized and young firms and for firms in countries with lower access to credit and weaker investor protection. Further, using the recent financial crisis as a natural experiment, we show that financial flexibility status allows companies to reduce the negative impact of liquidity shocks on their investment decisions. Our findings support the hypothesis that financial flexibility relates to companies
JEL Code
G31 : Financial Economics→Corporate Finance and Governance→Capital Budgeting, Fixed Investment and Inventory Studies, Capacity
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
D92 : Microeconomics→Intertemporal Choice→Intertemporal Firm Choice, Investment, Capacity, and Financing
15 August 2013
WORKING PAPER SERIES - No. 1577
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Abstract
This paper uses a non-parametric matching procedure to match survey replies to balance sheet information. It draws on the SAFE survey on access to finance for a sample of 11886 firms in the euro area which are matched with their nearest neighbour in an extended data-set with balance sheet information on 2.3 million firms. We investigate the role of firm characteristics with respect to the experience of facing financing obstacles in the period 2009-2011. We distinguish between firms' perceived financing constraints and actual financing constraints. We find that more pro table firms are less likely to face actual financing constraints. Also firms with more working capital and lower leverage ratios are less likely to be actually financially constrained, however profitability measures seem to be more robust. Firms are more likely to perceive access to finance problematic when they have more debt with short term maturity. Finally, firm age, but not size, is important in explaining both the perceived and the actual financial constraints.
JEL Code
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
G30 : Financial Economics→Corporate Finance and Governance→General
G10 : Financial Economics→General Financial Markets→General
O16 : Economic Development, Technological Change, and Growth→Economic Development→Financial Markets, Saving and Capital Investment, Corporate Finance and Governance
K40 : Law and Economics→Legal Procedure, the Legal System, and Illegal Behavior→General
8 August 2013
OCCASIONAL PAPER SERIES - No. 151
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Abstract
This report analyses and reviews the corporate finance structure of non-financial corporations (NFCs) in the euro area, including how they interact with the macroeconomic environment. Special emphasis is placed on the crisis that began in 2007-08, thus underlining the relevance of financing and credit conditions to investment and economic activity in turbulent times. When approaching such a broad topic, a number of key questions arise. How did the corporate sector
JEL Code
E0 : Macroeconomics and Monetary Economics→General
E5 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit
13 December 2012
WORKING PAPER SERIES - No. 1502
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Abstract
While many theories of accounts payable and receivable are related to firm performance, there has not been a direct test whether firms actively use them to manage their growth. We argue that it is not just the accounts payable but also the accounts receivable that matter. While the former help to alleviate imperfections in the financial market, the latter do so in the product market. Using over 2.5 million observations for 600.000 firms in 8 euro area countries in the period 1993-2009, we show that firms use the trade credit channel to manage growth. In countries where the trade credit channel is more present, the marginal impact is lower, but the total impact is still bigger. Further, firms that are more vulnerable to financial market imperfections, and therefore more likely to be financially constrained, rely more on the trade credit channel to manage growth. Finally, we show that also the overall conditions of the financial market matter for the importance of the trade credit channel for growth.
JEL Code
C23 : Mathematical and Quantitative Methods→Single Equation Models, Single Variables→Panel Data Models, Spatio-temporal Models
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
L25 : Industrial Organization→Firm Objectives, Organization, and Behavior→Firm Performance: Size, Diversification, and Scope
10 February 2011
WORKING PAPER SERIES - No. 1293
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Abstract
In this study we investigate the determinants of financing obstacles using survey data on a sample of around 5000 firms from the euro area countries. This completely new survey – started at the end of 2009 - gives us the opportunity to test whether firm characteristics such as size, age, economic branch, financial autonomy and ownership are valid predictors of financing obstacles also during the recent financial crisis. Our results show that only age and ownership are robust explanatory variables for firms’ perceived financing obstacles while mixed results are found for size and economic branches.
JEL Code
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
G30 : Financial Economics→Corporate Finance and Governance→General
G10 : Financial Economics→General Financial Markets→General
O16 : Economic Development, Technological Change, and Growth→Economic Development→Financial Markets, Saving and Capital Investment, Corporate Finance and Governance
K40 : Law and Economics→Legal Procedure, the Legal System, and Illegal Behavior→General
23 September 2009
WORKING PAPER SERIES - No. 1093
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Abstract
Based on a rich database of government bond spreads and macroeconomic indicators over the period 2001-2008, we propose an empirical assessment of the role of fundamentals in driving long-term sovereign bond spreads of the new EU countries (Bulgaria, Czech Republic, Latvia, Lithuania, Hungary, Poland, Romania and Slovakia). The results of a dynamic panel error correction model that accounts for both common long-run determinants and cross-country heterogeneities in sovereign bond spreads tend to suggest that fundamentals still matter for market’s assessment of a country creditworthiness. Countries’ levels of external debt, fiscal and current account balances, exchange and inflation rates, their degree of trade openness as well as short-term interest rate spreads play an important role in the new EU countries’ access to long-term finance. We furthermore challenge the pooled mean approach in order to check whether other factors may become relevant in the long-run for two sub-groups of countries according to the developments in their current account balances. Fiscal fundamentals seem to matter most for one group of countries, those characterised by widening external imbalances and historically high levels of spreads. In a context of heightened risk aversion and potential for spill over effects, this group of countries are more exposed to domestic sources of vulnerability as well as to swings in market perceptions of sovereign risks.
JEL Code
G12 : Financial Economics→General Financial Markets→Asset Pricing, Trading Volume, Bond Interest Rates
H60 : Public Economics→National Budget, Deficit, and Debt→General
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
27 January 2009
WORKING PAPER SERIES - No. 997
Details
Abstract
This paper investigates whether financial obstacles, and, more generally, financial pressure faced by firms, significantly affect firm growth. For this purpose, we use an unbalanced panel of about 1,000,000 observations for around 155,000 non-financial corporations in five euro area countries. In addition to the balance sheet information in this panel, we also rely on firm-level survey data. In this way we are able to work out a direct measure of the firms' probability of facing financing obstacles. Our results indicate that, though based on few variables, this measure appears to be relevant in explaining firm growth in four out of the five countries considered. Other firm-level variables related to the financial pressure faced by firms, such as cash flow (debt burden) are found to exert a positive (negative) impact on firm growth, while the results for leverage are less clear-cut.
JEL Code
C23 : Mathematical and Quantitative Methods→Single Equation Models, Single Variables→Panel Data Models, Spatio-temporal Models
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
L11 : Industrial Organization→Market Structure, Firm Strategy, and Market Performance→Production, Pricing, and Market Structure, Size Distribution of Firms
L25 : Industrial Organization→Firm Objectives, Organization, and Behavior→Firm Performance: Size, Diversification, and Scope
22 September 2008
WORKING PAPER SERIES - No. 943
Details
Abstract
This paper analyses the impact that firms financial position has on investment decisions using panel data from a large sample of non-financial corporations(around 120,000 firms) in six euro area countries(Belgium, Germany, France, Italy, the Netherlands and Spain). The results indicate that financial position is important to explain capital expenditures, as financial pressure appears relevant in explaining investment dynamics when it is proxied by cash flow, indebtedness and debt burden. The results also show differences in the sensitivity of investment rates to changes in financial pressure across countries, which appears to be especially large in the Netherlands and Italy and relatively small in Germany.
JEL Code
C33 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Panel Data Models, Spatio-temporal Models
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
J23 : Labor and Demographic Economics→Demand and Supply of Labor→Labor Demand
28 June 2007
OCCASIONAL PAPER SERIES - No. 63
Details
Abstract
This report analyses the financial position of non-financial enterprises in the euro area, in particular the amount of external financing, the choice between debt and equity and the composition and maturity structure of debt. It aims at identifying the main features of the euro area, as well as the peculiarities that depend on the country of origin and the sector of activity. Attention is also devoted to assessing whether a country's institutional features are correlated with different financial structures by firms. In light of the particular interest in the access of small and medium-sized enterprises (SMEs) to financing, the report also analyses how financing patterns differ across large, medium-sized and small enterprises. Finally, the report discusses the recent trends observed in the corporate finance landscape of the euro area over the past few years. Although it is still too early to pass final judgement, vast structural changes are underway that could have already influenced in a positive way in the availability of external funds for firms. All in all, a comprehensive understanding of corporate finance in the euro area is important from a monetary policy perspective, given its impact on the transmission mechanism and for productivity and economic growth. Moreover, such an understanding is also relevant from a financial stability perspective. A first assessment is now possible eight years into the third stage of Economic and Monetary Union (EMU), given that sufficient data have been accumulated during this period. This assessment is particularly important as the introduction of the single currency has had significant structural effects on the working of financial markets, increasing their size and liquidity, and fostering cross-border competition. The data available for this report generally cover the period 1995-2005, and the cut-off date for the statistics included is 10 March 2007.
JEL Code
D92 : Microeconomics→Intertemporal Choice→Intertemporal Firm Choice, Investment, Capacity, and Financing
G30 : Financial Economics→Corporate Finance and Governance→General
G10 : Financial Economics→General Financial Markets→General
O16 : Economic Development, Technological Change, and Growth→Economic Development→Financial Markets, Saving and Capital Investment, Corporate Finance and Governance
K40 : Law and Economics→Legal Procedure, the Legal System, and Illegal Behavior→General
26 June 2006
WORKING PAPER SERIES - No. 642
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Abstract
This paper investigates the financing conditions of non-financial corporations in the euro area. We develop a new firm classification based on micro data by distinguishing between three groups of firms: unconstrained, relatively and absolutely constrained firms. We also provide further evidence on the sources of the correlation between corporate cash flow and cash savings by conducting the analysis in a dynamic framework. Contrary to previous evidence based mainly on US firms, our results suggest that the propensity to save cash out of cash flows is significantly positive regardless of firms' financing conditions. This implies that even for firms with favourable external financing conditions, the internal cash flow is used in a systematic pattern for the inter-temporal allocation of capital. The results also indicate that the cash flow sensitivity of cash holdings cannot be used for testing financing constraints of euro area firms.
JEL Code
D92 : Microeconomics→Intertemporal Choice→Intertemporal Firm Choice, Investment, Capacity, and Financing
G3 : Financial Economics→Corporate Finance and Governance
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
11 February 2005
OCCASIONAL PAPER SERIES - No. 23
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Abstract
This occasional paper explains why the bank lending survey was developed by the ECB and describes its main features. It discusses the importance of credit developments for both the economy and the functioning of monetary policy, and further clarifies why the survey was introduced. Furthermore, the paper demonstrates that the value added of implementing a bank lending survey for the euro area lies in particular in the way it provides greater insight into developments in credit standards, non-interest rate credit conditions and terms, the risk perception of banks and the willingness of banks to lend. Credit standards are the internal guidelines or criteria of a bank which reflect the bank
JEL Code
E43 : Macroeconomics and Monetary Economics→Money and Interest Rates→Interest Rates: Determination, Term Structure, and Effects
E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
5 May 2004
OCCASIONAL PAPER SERIES - No. 14
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Abstract
In this paper, we present a set of specific measures to quantify the state and evolution of financial integration in the euro area. Five key markets are considered, namely the money, corporate bond, government bond, credit and equity markets. Building upon the law of one price, we developed two types of indicators that can be broadly categorised as price-based and news-based measures. We complemented these measures by a number of quantity-based indicators, mainly related to the evolution of the home bias. Results indicate that the unsecured money market is fully integrated, while integration is reasonably high in the government and corporate bond market, as well as in the equity markets. The credit market is among the least integrated, especially in the short-term segment.
JEL Code
G12 : Financial Economics→General Financial Markets→Asset Pricing, Trading Volume, Bond Interest Rates
G14 : Financial Economics→General Financial Markets→Information and Market Efficiency, Event Studies, Insider Trading
G15 : Financial Economics→General Financial Markets→International Financial Markets
G18 : Financial Economics→General Financial Markets→Government Policy and Regulation
2020
Review of Behavioral Finance
  • Ferrando A., Ganoulis I., C. Preuss
2020
Journal of Corporate Finance
  • Moro A., Maresch D., Fink M., Ferrando A. and Piga C.
2019
Intereconomics
  • Veugelers, R., Ferrando , A., Lekpek, S., Weiss, C. T.
2019
Small Business Economics
  • Bongini, P., Ferrando, A., Rossi, E., Rossolini, M.
2019
EIB working paper 2019/03
  • A. Ferrando, R. Pal and E. Durante
2018
EIB Working Paper Series 2018/4
Investment of financially distressed firms: the role of trade credit
  • A. Ferrando and M. Wolski
2018
EIB Working Paper series, 2018/7
Young SMEs: Driving innovation in Europe?
  • R. Veugelers, A. Ferrando, S. Lekpek and C. T Weiss
2018
EIB Working Paper series, 2018/2
  • A. Ferrando and S. Lekpek
2018
International Journal of Finance and Economics
  • A. Ferrando and A. Ruggieri
2018
Economia Politica
  • A. Ferrando and C. Preuss
2018
Journal of Money, Credit and Banking
  • A. Ferrando, A. Popov and G. Udell
2018
Chapter 13 in “Finance and Investment: The European Case, edited by C. Mayer, S. Micossi, M. Onado, M. Pagano and A. Polo. Oxford: Oxford University Press, 2018
The Capital Markets Union and firms’ access to external market-based finance: Evidence and policy implications from a novel survey-based index
  • P. Bongini, A. Ferrando, E. Rossi and M. Rossolini
2017
European Investment Bank, 2017
  • P. Brutscher and A. Ferrando
2017
Journal of Banking and Finance, vol. 81, August 2017, pp. 65-80
  • A. Ferrando, A. Popov and G. Udell
2017
CEPR DP 12006, 2017
  • P. Bongini, A. Ferrando, E. Rossi and M. Rossolini
2017
Chapter 1, pp. 3-28 in “Access to Bank Credit and SME Financing” edited by S. Rossi, Palgrave Publisher, 2017
  • A. Ferrando and E. Mavrakis
2017
Chapter 2. pp. 29-58 in “Access to Bank Credit and SME Financing” edited by S. Rossi, Palgrave Publisher, 2017
  • A. Moro, D. Maresch, A. Ferrando and J. Barbar
2017
European Financial Management, vol. 23, issue 1, pp. 87-126, January 2017
  • A. Ferrando, M. T. Marchica and R. Mura
2016
European Journal of Finance, 9 September 2016
  • A. Moro, D. Maresch and A. Ferrando
2015
The Economic and Social Review, vol. 46, No1, pp.87-118
Financial obstacles and financial conditions of firms: do perceptions match the actual conditions
  • A. Ferrando, K. Mulier
2015
BIS IFC Bulletin, forthcoming
Firms’ financial statements and competitiveness: an analysis for European non-financial corporations using micro-based data
  • N. Benatti, A. Ferrando and P. Lamarche
2015
PME Rapport sur l’evolution des PME, Observatoire des PME, bpiFrance, pp. 139-144.
  • A. Ferrando
2015
Chapter 6 in “Public Private Partnerships for infrastructure and enterprise funding. Principles, Practices and Perspectives”. Edited by S. Caselli, G. Corbetta and V. Vecchi, Palgrave Publisher,
SMEs access to credit: are government measures helpful for constrained firms?
  • A. Ferrando, M. Rossolini
2014
European Journal of Law and Economics
Multiple Market Imperfections, Firm profitability and investment
  • G. Calcagnini, A. Ferrando and G. Giombini
2014
Economic Modelling
Does Employment Protection Legislation Affect Firm Investment? The European Case
  • G. Calcagnini, A. Ferrando and G. Giombini
2013
Journal of Banking and Finance 37 (2013), pp. 3035-3046
Do firms use the Credit Channel of Trade to finance growth?
  • A. Ferrando and K. Mulier
2013
BIS IFC Bulletin n. 36, February
Measuring the opinion of firms on the supply and demand of external financing in the euro area
  • A. Ferrando, N. Griesshaber, P. K?hler-Ulbrich; S. Pérez-Duarte and N. Schmitt
2012
Small Businesses in the Aftermath of the Crisis, eds G. Calcagnini and I. Favaretto, eds, Springer Verlag
Access to finance in the euro area: what are SMEs telling us about the crisis?
  • A. Ferrando
2011
The European Journal of Finance
Financing obstacles and growth: an analysis for euro area companies
  • C. Coluzzi, A. Ferrando and C. Martinez-Carrascal
2010
Sovereign Debt: From Safety to Default , Robert Kolb editor, John Wiley & Sons
Sovereign bond spreads in Central and Eastern Europe
  • I. Alexopolou, I. Bunda, A. Ferrando
2010
Journal of Eastern European Economics (EEE), vol. 48, n.5,Sep-Oct, pp. 5-37
Determinants of government bond spreads in new EU countries
  • I. Alexopolou, I. Bunda, A. Ferrando
2010
The European Journal of Finance, Vol. 16, No. 2, February 2010, 153–171
Financing constraints and Firms’ cash policies in the euro area
  • R. Pal, A. Ferrando
2008
Handbook of European Financial markets and Institutions, edited by X. Freixas, P. Hartmann and C. Mayer, Oxford University Press
Measuring European Financial Integration
  • L. Baele, A. Ferrando, P. H?rdahl, E. Krylova, and C. Monnet
2007
n 6, Industrial Policy and Economic Reform papers, DG Enterprise and Industry
Is the growth of euro area small and medium-sized enterprises constrained by financing barriers?
  • A. Ferrando, P. Koehler-Ulbrich, R. Pal
2005
Elements of the euro area: integrating financial markets, M. Grande, J. Berg and F. P. Mongelli (eds), Ashgate, Aldershot
Concepts and measures of financial integration
  • A. Ferrando, J. Vesala
2005
Elements of the euro area: integrating financial markets, M. Grande, J. Berg and F. P. Mongelli (eds), Ashgate, Aldershot
Bond and Equity market integration
  • L. Baele, A. Ferrando
2004
Oxford Review of Economic Policy, vol. 20, no 4, pp. 509-530
Measuring the integration of euro area capital markets
  • L. Baele, A. Ferrando, P. H?rdahl, E. Krylova, and C. Monnet
2000
Economic Notes, July, pp. 215-241
The Italian banking structure in the nineties: testing the multimarket contact hypothesis
  • R. De Bonis, A. Ferrando
1999
La questione dimensionale in Italia, F. Traù (ed.), Il Mulino, Bologna
Business shock e dimensione d’impresa
  • A. Ferrando, I. Ganoulis
1999
DG Enterprise working paper n. 4
Gross Fixed Capital Formation in Europe: 1970-1998
  • A. Ferrando
1998
Atti del Convegno SIS97 La statistica delle imprese, vol. 2, Tirrenia Stampatori, Torino
Errori di misurazione del costo del capitale e redditività delle imprese: un’analisi panel di imprese italiane
  • A. Ferrando, I. Ganoulis
1997
Quaderni di Statistica e Matematica applicata alle Scienze Economico-Sociali, vol. XVIII, n.1-4, pp. 121-138
Le determinanti dei tassi di interesse sui prestiti nei mercati locali
  • A. Ferrando, R. De Bonis
1997
Nota di Lavoro 61.97, Fondazione ENI Enrico Mattei
Pyramidal Groups and external finance: an empirical investigation
  • M. Bianco, P. Casavola, A. Ferrando
1996
Rivista Internazionale di Scienze Economiche e Commerciali, vol.XLIV, 1, March
The adoption of advanced technologies in the Italian industrial sectors: a map from the census data
  • A. Ferrando
1995
Innocenzo Gasparini Institute (IGIER) Working paper n.86
The cost of durable assets in structure-performance models
  • A. Ferrando, I. Ganoulis
1994
Quaderni di economia e finanza, anno III, n.1, pp. 107-139
L’industria italiana all’inizio degli anni novanta: un’analisi su dati di bilancio
  • M. Bianco, A. Ferrando, G. Pellegrini and S. Trento
1994
CSC Ricerche n.109
Capitalisation and structure-performance models
  • A. Ferrando, I. Ganoulis
1992
Ricerche Economiche, n.3-4, Luglio-Dicembre , pp.221-242
Patent policy and vertical product differentiation
  • A. Ferrando
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