Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/167605
Authors: 
Hennecke, Peter
Neuberger, Doris
Ulbricht, Dirk
Year of Publication: 
2017
Series/Report no.: 
Thünen-Series of Applied Economic Theory 152
Abstract: 
Guarantee banks backed by the state aim to close the gap in the financing of small and medium-sized enterprises or start-ups caused by lacking collateral or equity and high information asymmetry. The present study quantifies the economic and fiscal net benefits of guarantee banks in the new federal states of Germany, where economic development is still lacking behind those in the old federal states. Using data of five guarantee banks and results from enterprise and bank surveys, we measure finance and project additionality of loan and equity guarantees provided over the period 1991-2015. Cost-benefit analyses show that the economic benefits of the guarantee banks are considerable because of increased production and employment, while the economic costs are negligible. The real GDP increases by about 1.2 euro per euro guarantee each year. In the years 2008 to 2014, there were net fiscal gains of several hundred million euros in the respective federal states.
Subjects: 
small business finance
loan guarantee schemes
collateral
credit rationing
public guarantees
cost-benefit analysis
JEL: 
D61
E17
G21
G28
G38
H81
O16
Document Type: 
Working Paper

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