Firms and Banks

Session Submission Type: Panel

Brief Description

This session explores the intricate relationship between financial institutions and firms, highlighting the impact of banking relationships, geopolitical risks, border effects, and media influence on corporate performance.

The first paper examines the consequences of bank liquidations in Ukraine, showing that firms relying on a single lender face significant financial distress and employment losses when their main bank fails. The findings emphasize the importance of banking relationships for firm survival.

The second paper investigates how Russia’s 2014 annexation of Crimea affected Ukrainian firms with Russian ties. Firms with deeper financial connections to Russia experienced greater declines in sales, investment, and financing, ultimately increasing their likelihood of market exit. This study underscores the role of geopolitical risks in shaping corporate strategies.

The third paper discusses the challenges faced by firms in border regions of the EU, where despite economic integration efforts, physical and institutional barriers continue to hinder firm growth. The research provides insights into how border effects can disadvantage firms in cross-country markets.

The fourth paper explores the role of media in banking crises, using Russia’s 1998 banking crisis as a case study. It finds that access to independent media influences depositor behavior, financial development, and banking stability. The study highlights how media bias affects public trust in banks and financial systems.

Together, these papers provide a comprehensive view of how financial and non-financial factors—ranging from banking networks to political and media influences—shape firm performance and economic stability.

Sub Unit

• Economic History/Economics/Business

Chair

• John S Earle, George Mason U

Papers

• Corporate Performance and Policies Under Scrutiny: Guilty by Association? - Anastasiya Shamshur, King's College London (UK)

• Growing in the Desert: A Comparative Analysis of Firms Located in EU Border Regions - Jan Fidrmuc, U of Lille (France)

• Crisis? What Crisis? Bank Stability, Financial Development and Propaganda - Koen Schoors, Ghent U (Belgium)

• Finance, Employment, and Survival: Evidence from Bank Liquidations in Ukraine - Solomiya Shpak, World Bank; John S Earle, George Mason U; Scott Gehlbach, U of Chicago

Discussant

• Natalya Naumenko, George Mason U