Small Business Economics

, Volume 43, Issue 3, pp 711–724

Partial credit guarantees and firm performance: evidence from Colombia

  • Irani Arráiz
  • Marcela Meléndez
  • Rodolfo Stucchi
Article

Abstract

This paper studies the effect of government-backed partial credit guarantees on firms’ performance in Colombia. These guarantees are automatically granted by the National Guarantee Fund (NGF) to firms without enough collateral to lift their credit constraints. We put together a panel of firms covering the period 1997–2007 that allows us to control for observed and unobserved firm characteristics potentially affecting both the selection of firms into the program and firms’ performance. We find that firms that gain access to credit backed by the NGF were able to grow in terms of both output and employment. However, we do not find any effect on productivity, wages, or investment.

Keywords

Partial credit guarantee Access to credit Firm growth Job creation Productivity 

JEL Classifications

H43 L25 O12 O54 L26 

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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  • Irani Arráiz
    • 1
  • Marcela Meléndez
    • 2
  • Rodolfo Stucchi
    • 1
  1. 1.Inter-American Development BankWashingtonUSA
  2. 2.EconestudioBogotáColombia

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