Spain | What can 240,000 new credit transactions tell us about the impact of NGEU funds?

Summary

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.

Key points

• Key points:
• 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.

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