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The effects of EU-funded guarantee instruments of the performance of small and medium enterprises: Evidence from France


  • Bertoni, Fabio
  • Colombo, Massimo G.
  • Quas, Anita


This paper provides a policy-oriented summary of the econometric study commissioned by the European Court of Auditors, in the context of its audit of EU-funded loan guarantee instruments.2 The study assesses the real performance effects of EU-guaranteed loans to SMEs disbursed in France during the years 2002 to 2016. The study estimates the average treatment effect of guaranteed loans over a 10-year period around disbursement, using a combination of difference-in-difference estimation, coarsened exact matching and propensity score analysis. On average, French SMEs benefitting from EU-guaranteed loans experienced additional 9% asset growth, 7% sales growth, and 8% employment growth compared to the control group. The economic significance of the effect is typically stronger for smaller and younger firms. Beneficiary SMEs also experienced 5% lower default rates. The study also estimates the effects of guaranteed loans on SME productivity. Consistent with earlier works, the analysis finds a short-run dip in productivity, accompanied by a medium-run recovery and a long-run positive effect, signalling the presence of adjustment costs in the production function following loan-induced investments. The study concludes by discussing potential implications for policy makers and further research.

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  • Bertoni, Fabio & Colombo, Massimo G. & Quas, Anita, 2018. "The effects of EU-funded guarantee instruments of the performance of small and medium enterprises: Evidence from France," EIF Working Paper Series 2018/52, European Investment Fund (EIF).
  • Handle: RePEc:zbw:eifwps:201852

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    References listed on IDEAS

    1. Lazzarini, Sergio G. & Musacchio, Aldo & Bandeira-de-Mello, Rodrigo & Marcon, Rosilene, 2015. "What Do State-Owned Development Banks Do? Evidence from BNDES, 2002–09," World Development, Elsevier, vol. 66(C), pages 237-253.
    2. Stefano Iacus & Gary King & Giuseppe Porro, 2008. "Matching for Causal Inference Without Balance Checking," UNIMI - Research Papers in Economics, Business, and Statistics unimi-1073, Universitá degli Studi di Milano.
    3. Gebauer, Stefan & Setzer, Ralph & Westphal, Andreas, 2018. "Corporate debt and investment: A firm-level analysis for stressed euro area countries," Journal of International Money and Finance, Elsevier, vol. 86(C), pages 112-130.
    4. Robert E. Carpenter & Bruce C. Petersen, 2002. "Capital Market Imperfections, High-Tech Investment, and New Equity Financing," Economic Journal, Royal Economic Society, vol. 112(477), pages 54-72, February.
    5. Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January.
    6. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
    7. Chatzouz, Moustafa & Gereben, Áron & Lang, Frank & Torfs, Wouter, 2017. "Credit guarantee schemes for SME lending in Western Europe," EIB Working Papers 2017/02, European Investment Bank (EIB).
    8. Kraemer-Eis, Helmut & Botsari, Antonia & Gvetadze, Salome & Lang, Frank & Torfs, Wouter, 2018. "European Small Business Finance Outlook: June 2018," EIF Working Paper Series 2018/50, European Investment Fund (EIF).
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    Cited by:

    1. Kraemer-Eis, Helmut & Botsari, Antonia & Gvetadze, Salome & Lang, Frank & Torfs, Wouter, 2019. "European Small Business Finance Outlook: June 2019," EIF Working Paper Series 2019/57, European Investment Fund (EIF).
    2. Brault, Julien & Signore, Simone, 2019. "The real effects of EU loan guarantee schemes for SMEs: A pan-European assessment," EIF Working Paper Series 2019/56, European Investment Fund (EIF).

    More about this item


    EIF; credit guarantees; credit constraints; real effects; small and medium-sized enterprises;

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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