Objective The global financial crisis and slow ensuing recovery have put severe strains on the fiscal positions of many OECD countries, raising serious concerns about fiscal sustainability, especially in the Euro Area. The challenge facing these countries is how to bring debt down to safer levels in the face of a weak recovery. Several EU governments undertook large fiscal consolidations plans that involved a combination of spending cuts and tax hikes, aiming at sustainably reducing public deficits and debt. Although the effects of fiscal consolidation on output and unemployment have been extensively investigated, existing studies have focused on aggregate level data and have failed to consider the heterogeneous effects that fiscal consolidation might have on the economic performance of the business sector. This omission, due in large part to the scarcity of firm-level data capturing how firm’s assets and liabilities are affected by fiscal consolidation, restricts our knowledge about how fiscal adjustments impacts economic performance. Making use of yet unexplored detailed firm level data and a range of econometric methods, FLASH will provide novel and robust empirical evidence on the causal impact of fiscal consolidation on the real and financial activities of different sized firms. Specifically, FLASH will pursue the following research objectives to explore the heterogeneous effects of fiscal consolidation on firms' balance sheets: Examine the causal effect of fiscal consolidation on firms' performance; Examine if the composition of fiscal consolidation (spending versus taxes-based) matters for firms; Examine how differently do small and large firms respond to fiscal consolidation; Examine if the effects of fiscal consolidation on real (Investment, Sales and Employment) and financial (Debt, Cash-holding, Dividend and Equity) activities are heterogeneous across firms; Create a network and disseminate results to a broader audience. Fields of science social scienceseconomics and businesseconomicseconometricssocial sciencespolitical sciencespolitical policiescivil societynongovernmental organizationssocial scienceseconomics and businesseconomicsmonetary and financessocial sciencessociologygovernancetaxationsocial scienceseconomics and businessbusiness and managementemployment Keywords Fiscal consolidation Firm heterogeneity Firm-level data Programme(s) H2020-EU.1.3. - EXCELLENT SCIENCE - Marie Skłodowska-Curie Actions Main Programme H2020-EU.1.3.2. - Nurturing excellence by means of cross-border and cross-sector mobility Topic(s) MSCA-IF-2016 - Individual Fellowships Call for proposal H2020-MSCA-IF-2016 See other projects for this call Funding Scheme MSCA-IF - Marie Skłodowska-Curie Individual Fellowships (IF) Coordinator UNIVERSITY OF YORK Net EU contribution € 183 454,80 Address HESLINGTON YO10 5DD York North Yorkshire United Kingdom See on map Region Yorkshire and the Humber North Yorkshire York Activity type Higher or Secondary Education Establishments Links Contact the organisation Opens in new window Website Opens in new window Participation in EU R&I programmes Opens in new window HORIZON collaboration network Opens in new window Total cost € 183 454,80