Partial Credit Guarantees and Firm Performance: Evidence from the Colombian National Guarantee Fund
This paper studies the effect of government-backed partial credit guarantees on firms' performance. These guarantees are automatically granted to firms without enough collateral in order to lift their credit constraints. We put together a panel, covering the period 1997-2007, that combines data from DANE's Annual Manufacturing Survey; DIAN's export and import information; and firm-level records from the National Guarantee Fund (NGF), the government agency in charge of implementing this policy. Using propensity score matching and difference-in-differences, we found that firms that gain access to credit backed by the NGF are able to grow in terms of both output and employment. However, we did not find any effect on productivity, wages, or investment. These results suggest that firms use the new funds as working capital to grow their businesses rather than for investment in new durable goods that increase their capital stock.
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| Format: | Working Papers biblioteca |
| Language: | English |
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Inter-American Development Bank
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| Subjects: | Financial Risk, Financial Service, Small Business, H43 - Project Evaluation • Social Discount Rate, L25 - Firm Performance: Size Diversification and Scope, O12 - Microeconomic Analyses of Economic Development, O54 - Latin America • Caribbean, Partial credit guarantee, access to credit, firm growth, job creation, productivity, SME, SMEs, PYMES, small and medium size enterprises, impact evaluation, evaluación de impacto, development effectiveness, efectividad en el desarrollo, productividad,, |
| Online Access: | http://dx.doi.org/10.18235/0011418 https://publications.iadb.org/en/partial-credit-guarantees-and-firm-performance-evidence-colombian-national-guarantee-fund |
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