Robert Lieli (Central European University) – The Impact of the National Bank of Hungary's Funding for Growth Scheme on Firm Level Investment

The National Bank of Hungary (Magyar Nemzeti Bank, MNB) introduced a "funding for lending'' type loan program aimed at small and medium sized enterprises (SMEs) in mid-2013. We combine firms' balance sheet data with two loan data sets to study the program's impact on firm level investment in 2013. We start from a simple difference-in-differences (DID) estimator, but argue that the parallel trend assumption that underlies the method is likely violated. Therefore, we propose a correction based on the idea that the selection process involved in securing a market loan in a pre-program year is, in some aspects, similar to the selection process into the program. Our results indicate that the program succeeded in generating extra investment in the SME sector that would not have taken place otherwise; specifically, we attribute to the program about 30% of the total investment undertaken by participating firms. Nevertheless, the effect is markedly heterogeneous with respect to firm size, being proportionally larger for smaller firms. A possible explanation for this finding is that smaller SMEs were initially more credit constrained on the market.

Date
Friday, 8 April 2022 | Start: 11:00 AM | End: 12:30 PM

Venue
The event is planned both, online via Webex and onsite with limited attendance by invitation only at the Oesterreichische Nationalbank, Otto-Wagner-Platz 3, 1090 Vienna, Veranstaltungssaal, Ground Floor.