Partial Credit Guarantees and Firm Performance: Evidence from Colombia

18 Pages Posted: 28 Sep 2013

See all articles by Irani Arraiz

Irani Arraiz

InterAmerican Development Bank

Marcela Meléndez

Econ Estudio

Rodolfo Stucchi

InterAmerican Development Bank

Date Written: August 30, 2013

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 in order to lift their credit constraints. We put together a panel of firms covering the period 1997-2007 that allow us to control for observed and unobserved firm characteristics, which could affect 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. We do not find, however, any effect on productivity, wages, or investment.

Keywords: Partial credit guarantee, access to credit, firm growth, job creation, productivity

JEL Classification: H43, L25, O12, O54

Suggested Citation

Arraiz, Irani and Meléndez, Marcela and Stucchi, Rodolfo, Partial Credit Guarantees and Firm Performance: Evidence from Colombia (August 30, 2013). Available at SSRN: https://ssrn.com/abstract=2331516 or http://dx.doi.org/10.2139/ssrn.2331516

Irani Arraiz (Contact Author)

InterAmerican Development Bank ( email )

1300 New York Avenue NW
Washington, DC 20008
United States

Marcela Meléndez

Econ Estudio ( email )

Carrera 7 No. 74-56 Of. 601
Bogotá
Colombia
(571) 743-3280 (Phone)
(571) 743-3283 (Fax)

Rodolfo Stucchi

InterAmerican Development Bank ( email )

1300 New York Avenue NW
Washington, DC 20577
United States
+1 (202) 5237619 (Phone)

HOME PAGE: http://https://www.sites.google.com/site/rodolfostucchi/

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