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

Author

Listed:
  • Balila Acurio

    (Central Bank of Peru)

  • Alessandro Tomarchio

    (University of Michigan, Ann Arbor and Central Bank of Peru)

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 firmlevel data and a Fuzzy Regression Discontinuity Design, we studied the impact of a large credit support program deployed in Peru in 2020 (Reactiva Perú). We examined real outcomes such as employment, sales, and survival. A positive and significant effect of the Reactiva loans on the number of employees was found; this effect continues to linger three years after the pandemic.

Suggested Citation

  • Balila Acurio & Alessandro Tomarchio, 2024. "The Effects of Business Credit Support Programs: Evidence from a Regression Discontinuity Design," IHEID Working Papers 20-2024, Economics Section, The Graduate Institute of International Studies.
    • Handle: RePEc:gii:giihei:heidwp20-2024
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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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