This paper examines the impact of government loan guarantees (GLGs) on the credit access and performance of small and medium-sized enterprises (SMEs) in China. Utilising a difference-in-differences approach, we find that GLGs significantly bolster SMEs’ access to credit by augmenting their long-term loans, whereas their effect on short-term loans is not significant. However, the implementation of GLGs leads to a decrease in SMEs’ profitability and research and development investment. These effects are particularly pronounced for SMEs experiencing severe financing constraints and for those in the private sector.
Huang et al. (Sat,) studied this question.
Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context: