Partial credit guarantees and firm performance: evidence from Colombia

Irani Arraiz, Marcela Meléndez and Rodolfo Stucchi

Small Business Economics, 2014, vol. 43, issue 3, 724 pages

Abstract: This paper studies the effect of government-backed partial credit guarantees on firms’ performance in Colombia. These guarantees are automatically granted by the National Guarantee Fund (NGF) to firms without enough collateral to lift their credit constraints. We put together a panel of firms covering the period 1997–2007 that allows us to control for observed and unobserved firm characteristics potentially affecting both the selection of firms into the program and firms’ performance. We find that firms that gain access to credit backed by the NGF were able to grow in terms of both output and employment. However, we do not find any effect on productivity, wages, or investment. Copyright Springer Science+Business Media New York 2014

Keywords: Partial credit guarantee; Access to credit; Firm growth; Job creation; Productivity; H43; L25; O12; O54; L26 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:sbusec:v:43:y:2014:i:3:p:711-724

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DOI: 10.1007/s11187-014-9558-4

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