Does the countryside lack cash (funding)? The impact of public bank loans on firm growth and its dependence on location

• We investigate whether public policies that aim to reduce credit constraints for small and medium-sized enterprises (SMEs) have different impacts on firms located in different types of regions. Using loan data from the state-owned Swedish bank Almi and combining coarsened exact matching with difference-in-difference regressions, we find positive but heterogeneous effects of loans on firm growth. Firms in urban regions are found to be less credit-constrained compared to firms located in other regions. However, the impact from receiving a public loan on firm growth is stronger for SMEs residing in major cities compared to firms in other regions. These results have important implications, suggesting that an evaluation of policies that are targeted to reduce credit constraints should take firm location into account.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Nyckelord

Credit constraints

Public policy

State-owned banks

SMEs

CEM

Matching

Causal treatment effect evaluation

Regional policy

Publikations- och innehållstyp

vet (ämneskategori)

rap (ämneskategori)