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The causal effect of credit guarantees for SMEs: evidence from Italy

D'Ignazio, Alessio and Menon, Carlo (2012) The causal effect of credit guarantees for SMEs: evidence from Italy. SERC Discussion Papers (SERCDP0123). Spatial Economics Research Centre (SERC), London School of Economics and Political Science, London, UK.

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Abstract

We evaluate the effectiveness of a partial credit guarantee program implemented in a large Italian region using unique microdata from a broad set of firms. Our results show that the policy was effective to the extent that it resulted in an improved financial condition for the beneficiary firms. While the total amount of bank debt was unaffected, firms showed a significant increase in the long-term component. Furthermore, targeted firms benefited from a substantial decrease in interest rates. On the other hand, there is some evidence that the probability of default increases as a consequence of the treatment, although the effect is only marginally significant. There are, instead, no effects on the real outcomes.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.spatialeconomics.ac.uk/SERC/publication...
Additional Information: © 2012 The Authors
Divisions: Spatial Economics Research Centre
Subjects: H Social Sciences > HC Economic History and Conditions
JEL classification: G - Financial Economics > G2 - Financial Institutions and Services
H - Public Economics > H2 - Taxation, Subsidies, and Revenue
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O16 - Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
Sets: Research centres and groups > Spatial Economics Research Centre
Date Deposited: 31 Jul 2014 09:41
Last Modified: 31 Jul 2014 12:53
Funders: Economic and Social Research Council, Department for Business, Innovation & Skills (BIS), Welsh Assembly Government
URI: http://eprints.lse.ac.uk/id/eprint/58555

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