IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2504.01964.html
   My bibliography  Save this paper

What Can 240,000 New Credit Transactions Tell Us About the Impact of NGEU Funds?

Author

Listed:
  • Alvaro Ortiz
  • Tomasa Rodrigo
  • David Sarasa
  • Sirenia Vazquez

Abstract

Using a panel data local projections model and controlling for firm characteristics, procurement bid attributes, and macroeconomic conditions, the study estimates the dynamic effects of procurement awards on new lending, a more precise measure than the change in the stock of credit. The analysis further examines heterogeneity in credit responses based on firm size, industry, credit maturity, and value chain position of the firms. The empirical evidence confirms that public procurement awards significantly increase new lending, with NGEU-funded contracts generating stronger credit expansion than traditional procurement during the recent period. The results show that the impact of NGEU procurement programs aligns closely with historical procurement impacts, with differences driven mainly by lower utilization rates. Moreover, integrating high-frequency financial data with procurement records highlights the potential of Big Data in refining public policy design.

Suggested Citation

  • Alvaro Ortiz & Tomasa Rodrigo & David Sarasa & Sirenia Vazquez, 2025. "What Can 240,000 New Credit Transactions Tell Us About the Impact of NGEU Funds?," Papers 2504.01964, arXiv.org, revised Apr 2025.
    • Handle: RePEc:arx:papers:2504.01964
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2504.01964
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Buda, G & Carvalho, V. M. & Corsetti, G & Duarte, J. B. & Hansen, S. & Moura, A. S. & Ortiz, à . & Rodrigo, T. & Rodríguez Mora, J. V. & Alves da Silva, G., 2025. "The Short Lags of Monetary Policy," Janeway Institute Working Papers 2504, Faculty of Economics, University of Cambridge.
      • Buda, G & Carvalho, V. M. & Corsetti, G & Duarte, J. B. & Hansen, S. & Moura, A. S. & Ortiz, A. & Rodrigo, T. & Rodríguez Mora, J. V. & Alves da Silva, G., 2025. "The Short Lags of Monetary Policy," Cambridge Working Papers in Economics 2509, Faculty of Economics, University of Cambridge.
      • Afonso S. Moura & Gergely Buda & Vasco M. Carvalho & Giancarlo Corsetti & João B. Duarte & Stephen Hansen & Álvaro Ortiz & Tomasa Rodrigo & José V. Rodríguez Mora & Guilherme Alves da Silva, 2025. "The Short Lags of Monetary Policy," Working Papers w202501, Banco de Portugal, Economics and Research Department.
    2. Pol Antras & Davin Chor & Thibault Fally & Russell Hillberry, 2012. "Measuring the Upstreamness of Production and Trade Flows," American Economic Review, American Economic Association, vol. 102(3), pages 412-416, May.
    3. Philippe Aghion & David Hemous & Enisse Kharroubi, 2009. "Credit Constraints, Cyclical Fiscal Policy and Industry Growth," NBER Working Papers 15119, National Bureau of Economic Research, Inc.
    4. Hebous, Shafik & Zimmermann, Tom, 2021. "Can government demand stimulate private investment? Evidence from U.S. federal procurement," Journal of Monetary Economics, Elsevier, vol. 118(C), pages 178-194.
    5. Aghion, Philippe & Hémous, David & Kharroubi, Enisse, 2014. "Cyclical fiscal policy, credit constraints, and industry growth," Journal of Monetary Economics, Elsevier, vol. 62(C), pages 41-58.
    6. Christiane Baumeister & Danilo Leiva-León & Eric Sims, 2024. "Tracking Weekly State-Level Economic Conditions," The Review of Economics and Statistics, MIT Press, vol. 106(2), pages 483-504, March.
    7. Claudio Ferraz & Frederico Finan & Dimitri Szerman, 2015. "Procuring Firm Growth: The Effects of Government Purchases on Firm Dynamics," NBER Working Papers 21219, National Bureau of Economic Research, Inc.
    8. Ghassibe, Mishel, 2021. "Monetary policy and production networks: an empirical investigation," Journal of Monetary Economics, Elsevier, vol. 119(C), pages 21-39.
    9. Daniel J. Lewis & Karel Mertens & James H. Stock & Mihir Trivedi, 2022. "Measuring real activity using a weekly economic index," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 37(4), pages 667-687, June.
    10. Eraslan, Sercan & Götz, Thomas, 2021. "An unconventional weekly economic activity index for Germany," Economics Letters, Elsevier, vol. 204(C).
    11. Valerie A. Ramey, 2011. "Can Government Purchases Stimulate the Economy?," Journal of Economic Literature, American Economic Association, vol. 49(3), pages 673-685, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hebous, Shafik & Zimmermann, Tom, 2021. "Can government demand stimulate private investment? Evidence from U.S. federal procurement," Journal of Monetary Economics, Elsevier, vol. 118(C), pages 178-194.
    2. Afonso S. Moura & Gergely Buda & Vasco M. Carvalho & Giancarlo Corsetti & João B. Duarte & Stephen Hansen & Álvaro Ortiz & Tomasa Rodrigo & José V. Rodríguez Mora & Guilherme Alves da Silva, 2025. "The Short Lags of Monetary Policy," Working Papers w202501, Banco de Portugal, Economics and Research Department.
    3. Gabriel, Ricardo Duque, 2024. "The Credit Channel of Public Procurement," Journal of Monetary Economics, Elsevier, vol. 147(S).
    4. Banerjee, Ryan & Zampolli, Fabrizio, 2019. "What drives the short-run costs of fiscal consolidation? Evidence from OECD countries," Economic Modelling, Elsevier, vol. 82(C), pages 420-436.
    5. Sanz Labrador, Ismael & Sanz-Sanz, José Félix, 2013. "Política fiscal y crecimiento económico: consideraciones microeconómicas y relaciones macroeconómicas," Macroeconomía del Desarrollo 5367, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    6. Olufemi Muibi Saibu & Abiodun Murithadoh Musbaudeen, 2018. "Monetary Policy Cyclicality, Industrial Output and Economic Growth Interactions in Nigeria," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 22(2), pages 457-470, Spring.
    7. Matilde Cappelletti & Leonardo M. Giuffrida, 2024. "Targeted Bidders in Government Tenders," CESifo Working Paper Series 11142, CESifo.
    8. Ma, Yong & Lv, Lin, 2023. "Financial development, financial instability, and fiscal policy volatility: International evidence," The North American Journal of Economics and Finance, Elsevier, vol. 64(C).
    9. Gianluca Benigno & Luca Fornaro, 2018. "Stagnation Traps," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 85(3), pages 1425-1470.
    10. Antonio Ciccone & Elias Papaioannou, 2023. "Estimating Cross-Industry Cross-Country Interaction Models Using Benchmark Industry Characteristics," The Economic Journal, Royal Economic Society, vol. 133(649), pages 130-158.
    11. Kouamé, Wilfried A.K. & Tapsoba, Sampawende J.-A., 2019. "Structural reforms and firms’ productivity: Evidence from developing countries," World Development, Elsevier, vol. 113(C), pages 157-171.
    12. Choi, Sangyup & Furceri, Davide & Huang, Yi & Loungani, Prakash, 2018. "Aggregate uncertainty and sectoral productivity growth: The role of credit constraints," Journal of International Money and Finance, Elsevier, vol. 88(C), pages 314-330.
    13. Stjepan Srhoj & Melko Dragojević, 2024. "Public Procurement and Supplier Job Creation: Insights from Auctions," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 40(2), pages 470-527.
    14. Dongwu Wu & Linlin Wu & Yongbo Ye, 2022. "RETRACTED ARTICLE: Industrial structure optimization, economic development factors and regional economic risk prevention in post COVID-19 period: empirical analysis based on panel data of Guangdong re," Journal of Combinatorial Optimization, Springer, vol. 44(5), pages 3735-3777, December.
    15. Aprigliano, Valentina & Emiliozzi, Simone & Guaitoli, Gabriele & Luciani, Andrea & Marcucci, Juri & Monteforte, Libero, 2023. "The power of text-based indicators in forecasting Italian economic activity," International Journal of Forecasting, Elsevier, vol. 39(2), pages 791-808.
    16. Donghun Yoon, 2023. "The Improvement Policy Design of Public Procurement Process for the Public Management Innovation in South Korea," SAGE Open, , vol. 13(1), pages 21582440231, March.
    17. Cristiana Benedetti-Fasil & Giammario Impullitti & Omar Licandro & Petr Sedlacek, 2021. "Heterogeneous Firms, R&D Policies and the Long Shadow of Business Cycles," JRC Working Papers on Territorial Modelling and Analysis 2021-04, Joint Research Centre.
    18. Inge M. Bijgaart & Sjak Smulders, 2018. "Does a Recession Call for Less Stringent Environmental Policy? A Partial-Equilibrium Second-Best Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(4), pages 807-834, August.
    19. Giovanni Dosi & Mauro Napoletano & Andrea Roventini & Tania Treibich, 2017. "Micro and macro policies in the Keynes+Schumpeter evolutionary models," Journal of Evolutionary Economics, Springer, vol. 27(1), pages 63-90, January.
    20. Ağca, Şenay & Igan, Deniz, 2019. "Fiscal consolidations and the cost of credit," Journal of International Economics, Elsevier, vol. 120(C), pages 84-108.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2504.01964. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.