The Effects of Business Credit Support Programs: Evidence from a Regression Discontinuity Design

Balila Acurio (balila.acurio@bcrp.gob.pe) and Alessandro Tomarchio (alextom@umich.edu)
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Balila Acurio: Central Bank of Peru
Alessandro Tomarchio: University of Michigan, Ann Arbor and Central Bank of Peru

No 20-2024, IHEID Working Papers from Economics Section, The Graduate Institute of International Studies

Abstract: Government-backed business loan programs have commonly been used as a policy tool for mitigating the impact of adverse scenarios such as the recent pandemic. However, the effects of these policies on micro, small and medium enterprises remain unclear, particularly in developing countries. Using firmlevel data and a Fuzzy Regression Discontinuity Design, we studied the impact of a large credit support program deployed in Peru in 2020 (Reactiva Perú). We examined real outcomes such as employment, sales, and survival. A positive and significant effect of the Reactiva loans on the number of employees was found; this effect continues to linger three years after the pandemic.

Keywords: government-backed loans; regression discontinuity; small and medium-sized enterprises; developing country; business loans; crisis (search for similar items in EconPapers)
JEL-codes: E26 G20 H32 H81 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2024-09-26
New Economics Papers: this item is included in nep-ent and nep-fdg
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