 The effects of small-firm loan guarantees in the UK: insights for the COVID-19 pandemic crisisJuanita Gonzalez-Uribe and Su Wang LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library Abstract: Loan guarantees are popular policy responses during the COVID-19 crisis. Despite their prevalence, evidence of their effectiveness is sparse. We estimate the impacts of UK guarantees during the Great Recession, by exploiting firm-size eligibility restrictions. Guarantees increased four-year performance, labour-productivity, and employment growth, but not investment. Results are driven by firms with high-training-costs employees. They are consistent with the guarantees enabling a small number of financially constrained firms to retain workers that helped rebuild the businesses post-crisis. The results suggest that COVID-19 responses based on guarantees alone can be regressive, because poorer workers are more likely to have low-training-costs jobs. Keywords: collateral; employment; financial constraints; investment; irreversibility; loan guarantees; Covid-19; coronavirus (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:118916 Access Statistics for this paper More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.