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The impact of Credit Guarantee Schemes on SMEs bankruptcies: an international overview

Author

Listed:
  • Paolo Agnese
  • Manuel Rizzo
  • Gianfranco A. Vento

Abstract

The paper investigates if Credit Guarantee Schemes (CGSs) have an effect on Small and Medium Enterprises (SMEs) bankruptcies. In such a framework, some recent studies are devoted to deepen the issue at national level. Most of them conclude that the CGSs may increase the probability of SMEs bankruptcies, suggesting the questions of moral hazard and adverse selection as possible motivations. In our analysis we consider a selection of countries examined by the Organisation for Economic Cooperation and Development (OECD) and perform a simple linear regression study in order to analyze the effectiveness of CGSs at international level. Results from the analysis are mixed, suggesting that the CGSs do not necessarily have a positive or negative impact on SMEs bankruptcies and more motivations are to be found in the specific country peculiarities. JEL classification numbers: G21, G28, G29

Suggested Citation

  • Paolo Agnese & Manuel Rizzo & Gianfranco A. Vento, 2019. "The impact of Credit Guarantee Schemes on SMEs bankruptcies: an international overview," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 9(4), pages 1-1.
    • Handle: RePEc:spt:apfiba:v:9:y:2019:i:4:f:9_4_1
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    Keywords

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    JEL classification:

    • 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
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other

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