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The additionality of Russia's two-tier support system for small and medium-sized enterprises

Author

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  • Bakaykina, A.

    (Center for the Development of Core Industrial Sectors, Moscow, Russia)

Abstract

The need to optimize the tasks performed by the state development institutions, considering the current sanctions policy, leads to the need to emphasize the importance of quantifying the effects of implementing state support programs. This work is devoted to assessing economic additionality - one the most important effect from the point of view of the "theory of change", reflecting the impact of companies' participation in government support programs on their economic performance. The three largest support programs for small and medium-sized enterprises in Russia were considered: preferential loans, partial and hybrid instrument (100% guarantee with preferential funding from the Bank of Russia), implemented with the active participation of federal and regional state development institutions using a twotier mechanism. The economic additionality in this study is assessed using the matching algorithm and the average treatment effect on the treated. The analysis showed that participation in all the programs led to an increase in company revenue by an average of 9.5-15.9% within one year and by 7.3-9.6% within two years. However, participants in guarantee programs are developing by increasing inventories, while recipients of preferential loans demonstrate a more stable growth trajectory. The findings were also confirmed by the results of difference-in-differences method.

Suggested Citation

  • Bakaykina, A., 2024. "The additionality of Russia's two-tier support system for small and medium-sized enterprises," Journal of the New Economic Association, New Economic Association, vol. 65(4), pages 68-94.
    • Handle: RePEc:nea:journl:y:2024:i:65:p:68-94
    DOI: 10.31737/22212264_2024_4_68-94
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    Keywords

    small and medium-sized enterprises; two-tier SME support; hybrid instrument; subsidized loans; guarantees; state-owned banks; development financial institutions; SME Corporation; SME Bank; RGO; asssessment of outcomes; state policy; PSM;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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