Entrepreneurship and Credit Constraints Evidence from a French Loan Guarantee Program

Entrepreneuriat et contraintes de crédit. Analyse d’un programme de prêts garantis

C Lelarge, David Sraer () and D Thesmar
Additional contact information
C Lelarge: CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - Groupe ENSAE-ENSAI - Groupe des Écoles Nationales d'Économie et Statistique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - Groupe ENSAE-ENSAI - Groupe des Écoles Nationales d'Économie et Statistique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique, OCDE / OECD - Organisation de Coopération et de Développement Economiques = Organisation for Economic Co-operation and Development
David Sraer: UC Berkeley - University of California [Berkeley] - UC - University of California
D Thesmar: HEC Paris - Ecole des Hautes Etudes Commerciales, CEPR - Center for Economic Policy Research

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Abstract: We use information on a French loan guarantee program in order to assess the consequences of credit constraints for new ventures. Loan Guarantee Programs, as implemented in France, are an effective instrument to help young firms grow faster, both in terms of employment and capital. These effects are quite persistent, since they are still significant four years after obtaining the guarantee. Loan guarantees also allow firms to pay cheaper interest rate, but a potential drawback of this policy consists in guaranteed ventures adopting riskier strategies and thus filing more often for bankruptcy. Last, we find no effect, at the industry level, on creation rates.

Keywords: New Firms; Entrepreneurship; Credit Constraints; Loan Guarantees; Création d'Entreprise; Entrepreneuriat; Contraintes de Crédit; Garantie de prêts (search for similar items in EconPapers)
Date: 2008-07
Note: View the original document on HAL open archive server: https://insee.hal.science/hal-05684909v1
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