Loan guarantees and credit supply

Breakthrough Path of Low-Level Equilibrium of China's Policy-Oriented Financing Guarantee Market

“…For instance, Ong et al ( 2003 ) and Cui et al ( 2011 ) found that the supply efficiency of credit guarantee market in Malaysia or China was generally low, while Seo and Park ( 2013 ) proved that the operation efficiency in Japanese was relatively high, that is, the average efficiency reached 87.4–93.2%. In order to explain the internal mechanism of the difference in guarantee efficiency between different countries, Ono et al ( 2013 ), Li and Lin ( 2017 ), Haas and Millone ( 2020 ), and Bachas et al ( 2021 ) proposed that government administrative intervention, multi-agent cooperation, information sharing, and risk compensation are the key factors affecting guarantee efficiency. However, the former research results are mostly based on the methods of financial ratio analysis, regression model analysis, and propensity score matching evaluation (Oh et al, 2009 ), which tend to ignore the dynamic changes of guarantee market and the interaction of business behaviors between guarantee subjects.…”

Optimal Allocation of Relief Funds: The Case of the Paycheck Protection Program

“…Our paper also contributes to the literature on loan guarantee programs, which are a common form of intervention in credit markets (Beck, Klapper and Mendoza, 2010). These programs have been studied from a theoretical (Gale (1990); Gale (1991)) and empirical perspective (Lelarge, Sraer and Thesmar (2010); Mullins and Toro (2016); Brown and Earle (2017);de Blasio et al (2018); Bachas, Kim and Yannelis (2020); Gonzalez-Uribe and Wang (2019); Julien and Vallée (2020)). We contribute to this literature by assessing the role of financial intermediaries and how to effectively design public policies aiming to protect employment in downturns.…”

Mediating Financial Intermediation

“…First, we contribute to the literature that analyses the efficiency of government interventions in credit markets. Governments either intervene in credit markets through state-owned banks (La Porta, Lopez-de Silanes, and Shleifer (2002)), loan subsidies (Bertrand, Schoar, and Thesmar (2007)) or loan guarantees (Bachas, Kim, and Yannelis (2019), Gale (1990), Gale (1991), Smith (1983), Barrot et al (2019), Brown andEarle (2017), Bach (2014)). We explore another type of intervention that has not being studied previously and that directly targets the relationship between the firm and its lenders.…”