Work in progress

— Flight from the Front Line: Geopolitical Risk, Distance, and Capital Flow Dynamics
(with Martin Hodula and Jan Janků)

Using narrative-validated geopolitical conflict episodes and monthly portfolio flow data for 40 advanced and emerging economies over 1995–2024, we study how geopolitical shocks reallocate international capital through a spatial exposure channel. We document a clear distance gradient: after the onset of conflict, net equity flows decline sharply in economies close to the epicenter and increase in more distant countries, consistent with a flight-to-safety reallocation. Net debt flows follow a similar spatial pattern but adjust more gradually, reflecting slower balance-sheet and rollover dynamics. Exchange rates react immediately, with currencies of proximate economies depreciating and those of more distant economies appreciating. Gross-flow decompositions suggest that the rapid equity response is mainly driven by foreign investors, while the debt response reflects both weaker foreign inflows and resident retrenchment.

— Distributional Effects of Borrower-Based Macroprudential Measures
(with Dominika Ehrenbergerová and Zuzana Gric)

Using household-level survey data on 22 European countries collected in four waves between 2010 and 2022, we document the distributional effects of borrower-based macroprudential measures (BBM). We find that the tightening of the BBM significantly reduces the availability of mortgages for lower-income households, leading to increased reliance on renting. Regulation works not only through the extensive margin by cutting off risky borrowers from the mortgage market, but also through the intensive margin by reducing the average loan amount of households with lower incomes. This reduction in risk has the positive side effect of lower borrowing costs, benefiting mainly households with above-average incomes. The easing of BBM, observed in several countries, does not yet fully reverse these effects.

— The Effect of Drought on Corporate Loans with AnaCredit Data
(with Jan Janků, Tomáš Karhánek, and Ivan Trubelík)

Using nearly 6 million loan-level observations for about 140 thousand firms between 2019 and 2023, we document a significant effect of long-term drought on corporate lending. We find that long-term drought significantly reduces both outstanding and new loans across all instrument types. Firms with more bank connections secure higher loan amounts but face lower probabilities of forming new bank relationships. Larger loans are less affected by drought, reflecting rigorous risk assessments, whereas larger firms do not enjoy the same protection, highlighting the complexity of banks' lending strategies under climate-related stress. The impact varies significantly across industries, with construction and mining showing resilience, while the energy and water supply sectors are more negatively affected. Additionally, further worsening of drought conditions leads to a lower probability of firms maintaining multiple credit instruments or bank relationships, indicating banks' strategies to consolidate risk while maintaining new lending capacities.