Do Firms Supported by Credit Guarantee Schemes Report Better Financial Results 2 Years After the End of Intervention?

Dvouletý, Ondřej; Čadil, Jan; Mirošník, Karel

doi:10.1515/bejeap-2018-0057

Cited by 23 publications

(21 citation statements)

References 94 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The present study extends our understanding of the outcomes of government financial support. The extant literature suggests that public financial support for SMEs is an effective policy instrument to address the market failure caused by information asymmetry; however, government intervention can also generate negative consequences by hindering the restructuring of weak SMEs [6,45,46]. In terms of the effects of credit guarantees, we found evidence of both positive and negative consequences for company growth.…”

Section: Discussionmentioning

confidence: 72%

The Interactive Effect of Government Financial Support and Firms’ Innovative Efforts on Company Growth: A Focus on Climate-Tech SMEs in Korea

Kim

Yeom

2020

Sustainability

View full text Add to dashboard Cite

Given the growing importance of climate technology and its early stage of industrial development, the Korean government has supported climate-tech small- and medium-sized enterprises (SMEs) through various policy measures, including credit guarantees. Although the extant literature argues that government financial support plays an important role in the growth of high-tech firms, research has been limited on the impacts of government financial support on company growth in the context of the climate-related industry. Using a sample of 582 climate-tech SMEs in Korea, this study explores the moderating effects of credit guarantees on the relationship between patents and firms’ sales growth as well as their direct effects on growth. This study found that credit guarantees and patent registration have positive effects on the increase in sales volume. Additionally, credit guarantees appear to weaken the relationship between patent registration and the sales growth rate. Based on these findings, we propose that, to develop the climate-technology industry, the voluntary innovation efforts of enterprises should be encouraged and credit guarantees should be provided for SMEs. In terms of managerial interventions, the government should especially avoid providing excessive benefits.

show abstract

Section: Discussionmentioning

confidence: 72%

The Interactive Effect of Government Financial Support and Firms’ Innovative Efforts on Company Growth: A Focus on Climate-Tech SMEs in Korea

Kim

Yeom

2020

Sustainability

View full text Add to dashboard Cite

show abstract

“…Naturally, the positive effect of support on productivity may be caused by an increase in productive investments that would not be realised without support [31,44]. The above-mentioned process relates historically to the theory of the resource-based view (RBV) of the firm, suggesting that more (public in this case) resources may boost a firm's competitiveness and production efficiency [24].…”

Section: Theoretical Backgroundmentioning

confidence: 99%

“…Given the fact that we lack good instruments for the IV's approach (e.g., applications scores), and we would like to assess the programme as a whole (not just firms above and below the threshold), we follow the PSM approach, which was for this purpose also recommended by the European Commission's representatives [86]. In line with the previously published studies, e.g., references [24,30,31,39,87], we combine the PSM approach with a difference in differences approach (DID), which takes into account changes in outcomes compared to the period before the intervention. The intervention took place during 2007-2013 and, thus, we consider as pre-treatment period the years 2005-2006 and post-intervention period the years 2014-2015 (two-year periods).…”

Section: Empirical Approach and Tested Hypothesismentioning

confidence: 99%

“…Despite the growing body of literature investigating the investment support policy contribution to competitiveness and efficiency of subsidised firms, e.g., references [21][22][23][24][25][26][27][28][29][30], the minority of studies focuses specifically on productivity effects, e.g., references [31][32][33][34][35]. The productivity assessment using only the labour productivity indicator, as common in a number of studies, e.g., references [25,[36][37][38][39][40], may bias the overall productivity effects.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

The Impact of Public Grants on Firm-Level Productivity: Findings from the Czech Food Industry

Dvouletý

Blažková

2019

Sustainability

Self Cite

View full text Add to dashboard Cite

Studying the effects of public entrepreneurship and small- and medium-sized enterprise (SME) policies on productivity (i.e., technological efficiency) is important, because the investment policies primarily aim to reduce allocation inefficiencies, enable usage of economies of scale, promote new production methods and technological development. We reviewed the recently published studies, and we show that they often lack fundamental information, such as a sample description and numbers of supported and non-supported firms. Keeping in mind the importance of transparent and rigorous empirical evaluations, we evaluated the effects of investment support from the European Regional and Development Fund (ERDF) on the productivity of the firms operating in the Czech food processing industry two years after the end of the programme. Methodologically, we apply the propensity score matching approach (PSM) combined with a difference in differences approach (DID) based on the firm-level data accounting for 157 firms (i.e., 77.3% of all beneficiaries within the industry) and a control sample of 1224 firms that have not been supported by the intervention. We use three measures of productivity—production efficiency, labour productivity and total factor productivity (TFP). The obtained findings showed that investment subsidy had a positive impact on labour productivity of supported firms. However, the effects on TFP were negative. The impact on production efficiency indicator was proven to be inconclusive. It follows from the results that the productivity of subsidised firms did not improve through an internal increase in efficiency (efficiency of the use of inputs), which indicates no significant technological change. The subsidy decision-making processes should be more careful and transparent to ensure allocating resources only to the projects with growth potential.

show abstract

“…FIs aim to increase the overall capital available by unlocking other public sector funding and private sector resources through co-financing and co-investment (Nyikos, 2016;Wishlade et al, 2019). The literature has also examined access to finance support measures such as grants and awards, loans with reduced interest rates, credit guarantees and support for research and development (R&D) (Dvoulety et al, 2019). It is important to note that the EU support schemes differ greatly in the various member states (Nyikos, 2013), consequentially different results may occur for MSME development measures depending on the type of programme and its implementation context (Potluka et al, 2010).…”

Section: Introductionmentioning

confidence: 99%

Micro-economic effects of public funds on enterprises in Hungary

Nyikos

Béres²,

Laposa

2020

Regional Studies, Regional Science

View full text Add to dashboard Cite

To enhance the effectiveness of and return on public investments, using financial instruments in addition to grants has lately become an increasingly preferred policy instrument choice in Central and Eastern Europe. The paper examines the impact different financial tools bring about at a micro-level. This enables recommendations for policy-makers to be produced on the type of assistance that could be of best use to improve access to finance for micro-, small and medium-sized enterprises, and thus achieve long-term, sustainable economic growth. The analysis is based on counterfactual evaluation and difference-indifferences. The findings indicate that the use of European Union funds (both grants and financial instruments) has a beneficial influence on employment and sales. However, the results also illustrate that in order to achieve the goal of higher impact and certain productivity effects, subsidies should be allocated to the initially less productive small firms in the less developed regions. Another important outcome is that, to some extent, financing through financial instruments has more direct relevance to advanced productivity, and due to their revolving nature, they generate more positive impact on the Hungarian economy than do grants.

show abstract

Do Firms Supported by Credit Guarantee Schemes Report Better Financial Results 2 Years After the End of Intervention?

Cited by 23 publications

References 94 publications

The Interactive Effect of Government Financial Support and Firms’ Innovative Efforts on Company Growth: A Focus on Climate-Tech SMEs in Korea

The Interactive Effect of Government Financial Support and Firms’ Innovative Efforts on Company Growth: A Focus on Climate-Tech SMEs in Korea

The Impact of Public Grants on Firm-Level Productivity: Findings from the Czech Food Industry

Micro-economic effects of public funds on enterprises in Hungary

Contact Info

Product

Resources

About