Public procurement and bank lendingBurger, Anže (Avtor) Marinč, Matej (Avtor) Polanec, Sašo (Avtor) Kotnik, Patricia (Avtor) public ordersbankinganalysispublic procurementgovernment procurementlendingsynthetic control methodcausal mediation analysisThis article unveils that government is intertwined with banking through a hitherto underexplored channel—through public procurement. On a comprehensive firm-level dataset that combines public procurement and accounting data, we apply the difference-in-differences method to show that treated firms that secure a public procurement contract can strengthen their bank borrowing terms. Treated firms obtain a greater amount of bank funding and a higher share of long-term funding at lower interest rates compared to the control firms. The impact on bank lending exceeds the positive impact due to higher revenues and suggests a positive non-revenue channel of public procurement.20242024-06-24 12:22:47Članek v reviji158970sl