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Using firm-level survey information, we investigate whether relationship lending affects firms' employment decisions in the face of negative sales shock. We find that firms with a durable relationship with their main bank display significantly less employment growth sensitivity to such shocks, especially where these are transitory. The result is stronger for younger and smaller firms that benefit from tighter bank-firm relationships, and for firms in sectors or economic environments where the costs of employment adjustment are greater. Our findings indicate that relationship lending provides liquidity insurance to firms to meet their demand for labor hoarding. [ABSTRACT FROM AUTHOR]

In this work, we analyze the relation between environmental risks and firms' investments, and whether this relationship is different for green firms. We merge balance sheet and patenting activity data on Italian firms in manufacturing sectors during the period 2010–2019 with information on environmental risk at the municipality level. We show that investments in capital assets are smaller on average for firms operating in municipalities with higher levels of environmental risk, particularly when the risk is hydrogeological or seismic in nature. This negative impact is significantly lower if firms operate in green sectors. This finding was reinforced after the ratification of the Paris Agreement and the consequent increased awareness of firms, investors, and policymakers about the importance of environmental risks and the ongoing ecological transition process. [ABSTRACT FROM AUTHOR]

This paper combines administrative data from the Italian social security administration and proprietary data from a major Italian commercial bank to analyse the impact of job protection legislation on mortgage conditions. An exogenous change in the degree of job protection against individual dismissals of workers with open‐ended contracts is identified by exploiting the labour market reform of 2015, the 'Jobs Act', which weakened the employment protection of new hires at medium‐sized and large private firms. We find that the lessening of job security led to lower mortgage amounts and a fall in leveraging capacity, as measured by the loan‐to‐value ratio. The impact of job insecurity is mitigated by the presence of co‐mortgagors; it is aggravated for young and low‐income mortgagors. [ABSTRACT FROM AUTHOR]

Banks with a low price-to-book ratio (PBR) have a greater propensity to pay out dividends. This propensity is especially marked for banks with a PBR below a threshold of 0.7, a situation that characterizes many banks in recent years, especially in the euro area. We demonstrate these features using data for 271 advanced economy banks in 29 jurisdictions. Dividend payouts as a proportion of profits rise in a non-linear way as the PBR falls below 0.7. In a hypothetical exercise with fixed balance sheet ratios, we find that a suspension of bank dividends in 2020 during the COVID-19 pandemic would have added, under different stress scenarios and parametrizations, an additional US$0.2–1.1 trillion of bank lending capacity in our sample, equivalent to 0.3–1.6% of total GDP. [ABSTRACT FROM AUTHOR]

In addition, the mistrust generated by an insufficient support to families that have suffered income losses during the crisis spills-over to other institutions, like the EU Parliament and the ECB, not directly involved in the design and implementation of cash transfers programs. The main independent variable, Income drop, measures the occurrence of a negative change in income registered at the onset of the Covid-19 crisis. Keywords: Covid-19 crisis; trust in institutions; cash transfers EN Covid-19 crisis trust in institutions cash transfers 647 654 8 07/21/22 20220701 NES 220701 1 Introduction Recent studies investigate the impact of the Covid-19 pandemic on trust. [Extracted from the article]

Using a new survey of Italian households, we study the effect of fear of COVID‐19 contagion and income risk on consumption. The survey elicits individual‐level indicators of fear of contagion, distinguishing between worries while working, shopping, traveling, eating out and meeting relatives or friends. We find that the probabilities of consumption drops and increased saving after the pandemics are positively associated to fear of contagion, particularly while shopping. Income uncertainty also contributes to savings increase and consumption drop. Our findings suggest that fear of contagion and income risk limits the effectiveness of policies aimed at stimulating consumption during the pandemic. [ABSTRACT FROM AUTHOR]

We employ a representative sample of 80,972 Italian firms to forecast the drop in profits and the equity shortfall triggered by the COVID-19 lockdown. A 3-month lockdown generates an aggregate yearly drop in profits of about 10% of GDP, and 17% of sample firms, which employ 8.8% of the sample's employees, become financially distressed. Distress is more frequent for small and medium-sized enterprises, for firms with high pre-COVID-19 leverage, and for firms belonging to the Manufacturing and Wholesale Trading sectors. Listed companies are less likely to enter distress, whereas the correlation between distress rates and family firm ownership is weak. (JEL G01, G32, G33) Received July 8, 2020; editorial decision July 20, 2020 by Editor Uday Rajan. [ABSTRACT FROM AUTHOR]

This paper studies the impact of changes in immovable property tax revenues on the growth rate of house prices by analysing a panel of 34 OECD countries over the period 1970–2014. Starting from the annual series of immovable property tax revenues, we isolate years of significant shifts in the property tax regime and study their impact on house prices. We find a strong negative relationship between increases in immovable property tax revenues and house prices. This relationship is robust to the inclusion of cyclical determinants of house prices, country and year fixed effects, and country‐specific linear trends. We also propose an instrumental variable strategy based on countries' legal origins that confirms a statistically significant negative impact of such taxes in the short run. [ABSTRACT FROM AUTHOR]

Using a survey of Italian households administered in November 2021, we study the effect of microeconomic and macroeconomic expectations about the health crisis and income growth on consumption expectations in 2022. The survey elicits individual-level indicators of income and consumption expectations, distinguishing between consumption at home, away from home, online and total. We find that expected household income and expected GDP growth are strongly related to consumption expectations; income risk is positively associated with expected consumption growth for richer households. Finally, our results indicate that health-related variables were not a major drivers of consumption expectations in 2022., Competing Interests: Conflict of interestThe authors declare no competing interests., (© The Author(s) 2023.)