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The Effects of Business Credit Support Programs: Evidence from a Regression Discontinuity Design

Author

Listed:
  • Acurio, Balila

    (Banco Central de Reserva del Perú
    Barcelona School of Economics)

  • Tomarchio, Alessandro

    (Banco Central de Reserva del Perú
    University of Michigan)

Abstract

Government-backed business loan programs have commonly been used as a policy tool for mitigating the impact of adverse scenarios such as the recent pandemic. However, the effects of these policies on micro, small and medium enterprises remain unclear, particularly in developing countries. Using firm-level data and a Fuzzy Regression Discontinuity Design, we study the impact of a large credit support program deployed in Peru in 2020 (Reactiva Peru). We examine real outcomes such as employment, sales, and survival rates. We find a positive and significant effect of Reactiva loans on the number of employees; this effect continues to linger three years after the pandemic.

Suggested Citation

  • Acurio, Balila & Tomarchio, Alessandro, 2025. "The Effects of Business Credit Support Programs: Evidence from a Regression Discontinuity Design," Working Papers 2025-001, Banco Central de Reserva del Perú.
    • Handle: RePEc:rbp:wpaper:2025-001
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    File URL: https://www.bcrp.gob.pe/docs/Publicaciones/Documentos-de-Trabajo/2025/documento-de-trabajo-001-2025.pdf
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    More about this item

    Keywords

    government-backed loans; regression discontinuity; small and medium-sized enterprises; developing country; business loans; crisis;
    All these keywords.

    JEL classification:

    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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