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Partial credit guarantees and SMEs financing

Author

Listed:
  • Boschi, Melisso
  • Girardi, Alessandro
  • Ventura, Marco

Abstract

Using data for the Italian Central Guarantee Fund for Small and Medium Enterprises, the paper analyses the effect of partial credit guarantees on firms’ financing. We show that neglecting heterogeneity in guarantee intensities, namely considering all firms as equally treated, leads to a mis-measurement of the additionality effect. Moreover, we document the existence of non-linear effects, suggesting that coverage ratios below a certain threshold are likely to be ineffective to lessen obstacles faced by firms when seeking external financing funds.

Suggested Citation

  • Boschi, Melisso & Girardi, Alessandro & Ventura, Marco, 2014. "Partial credit guarantees and SMEs financing," Journal of Financial Stability, Elsevier, vol. 15(C), pages 182-194.
  • Handle: RePEc:eee:finsta:v:15:y:2014:i:c:p:182-194
    DOI: 10.1016/j.jfs.2014.09.007
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    References listed on IDEAS

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    2. repec:gam:jsusta:v:10:y:2018:i:4:p:947-:d:137863 is not listed on IDEAS
    3. Piekalkiewicz, Marcin, 2016. "Money, Social Capital and Materialism. Evidence from Happiness Data," MPRA Paper 70522, University Library of Munich, Germany.
    4. repec:kap:sbusec:v:49:y:2017:i:2:d:10.1007_s11187-017-9845-y is not listed on IDEAS
    5. Guido de Blasio & Stefania De Mitri & Alessio D'Ignazio & Paolo Finaldi Russo & Lavina Stoppani, 2017. "Public guarantees on loans to SMEs: an RDD evaluation," Temi di discussione (Economic working papers) 1111, Bank of Italy, Economic Research and International Relations Area.
    6. Hennecke, Peter & Neuberger, Doris & Ulbricht, Dirk, 2017. "The economic and fiscal value of German guarantee banks," Thuenen-Series of Applied Economic Theory 152, University of Rostock, Institute of Economics.
    7. Yuting Li & Tong Chen & Baogui Xin, 2016. "Optimal Financing Decisions of Two Cash-Constrained Supply Chains with Complementary Products," Sustainability, MDPI, Open Access Journal, vol. 8(5), pages 1-17, April.
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    9. Paolo Finaldi Russo & Silvia Magri & Cristiana Rampazzi, 2016. "Innovative start-ups in Italy: their special features and the effects of the 2012 law," Questioni di Economia e Finanza (Occasional Papers) 339, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    Keywords

    Credit guarantees; Credit rationing; Additionality; SME; Italy;

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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