Entrepreurship and Credit Constraints - Evidence from a French Loan Guarantee Program

Claire Lelarge, D. Sraer and D. Thesmar
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D. Sraer: University of California, Berkeley
D. Thesmar: HEC Paris and CEPR

Documents de Travail de l'Insee - INSEE Working Papers from Institut National de la Statistique et des Etudes Economiques

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 (search for similar items in EconPapers)
JEL-codes: G24 G28 G33 H81 L26 M13 (search for similar items in EconPapers)
Date: 2008
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https://www.bnsp.insee.fr/ark:/12148/bc6p06zr07z/f1.pdf Document de travail de la DESE numéro G2008/07 (application/pdf)

Related works:
Chapter: Entrepreneurship and Credit Constraints: Evidence from a French Loan Guarantee Program (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:nse:doctra:g2008-07

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