Determinants of SME support participation in the Russian two-tier system

A. Bakaykina
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A. Bakaykina: Moscow City Strategic Development Agency, Moscow, Russia

Journal of the New Economic Association, 2024, vol. 62, issue 1, 75-100

Abstract: This article analyzes the factors influencing the participation of SMEs in the second-tier support mechanism, under which state banks provided end recipients with soft loans, partial guarantees and a hybrid instrument (100% guarantee with preferential funding from the Bank of Russia). The existing research literature predominantly considers the one-tier mechanism of state support, while the issues of functioning of the two-tier system remains understudied. Taking into account the peculiarities of the examines' support mechanism, the set of factors influencing the participation of companies in support programs was largely reconsidered. For quantitative assessment a classical logit model was used, however, taking into account the presence of "rare events" in the data structure, regressions were re-estimated using two modifications (relogit, firthlogit). The analysis showed that state banks in general have low incentives to serve new clients and use alternative lending technologies. At the same time, the mechanism of state support itself requires significant adjustments.

Keywords: two-tier support of SME; hybrid instrument; subsidized loans; guarantees; state-owned banks; development financial institutions; SME Corporation; SME Bank; RGO (search for similar items in EconPapers)
JEL-codes: G21 G23 G28 H81 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:nea:journl:y:2024:i:62:p:75-100

DOI: 10.31737/22212264_2024_1_75-100

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