The impact of government-supported participative loans on the growth of entrepreneurial ventures
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Knowledge AreaEconomía Financiera y Contabilidad
SponsorsWe are grateful to two anonymous referees and to the associate editor Maria Savona for the constructive comments. We acknowledge financial assistance from the Spanish Ministry of Economics and Competitiveness (ECO2014-55674-R).
Bibliographic CitationBertoni, Fabio & Martí, Jose & Reverte, Carmelo, 2019. "The impact of government-supported participative loans on the growth of entrepreneurial ventures," Research Policy, Elsevier, vol. 48(1), pages 371-384.
We study the employment and sales growth of entrepreneurial ventures that have received a governmentsponsored participative loan (PL), a hybrid form of financing between debt and equity. We use propensity-score matching (PSM) and instrumental variable analysis (2SLS) to study a sample of 512 entrepreneurial Ventures that received a PL from a Spanish government agency between 2005 and 2011. We find evidence that PLs significantly boosted their beneficiaries’ employment and sales. In the two years following loan issuance, a 1-million-Euro PL generated an increase in average employment of between 12.1 (PSM) and 14.7 (2SLS) units and an increase in sales of between 1.09 and 1.97 million Euro relative to the average for the two years prior to loan issuance. The effect is larger for high-tech, young and small entrepreneurial ventures and for those that received a PL during the global financial crisis. The effect on growth is significant and stable, and PLs increase their beneficiaries’ annual ...
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