Abstract
This paper investigates the economic impact and cost-efficiency of the loan guarantee programs of Bpifrance, which form the main public loan guarantee scheme in France. We first document that commercial banks aremore likely to use public loan guarantees for investment projects which appear relatively risky ex ante. Second, using propensity scorematching techniques and difference-in-difference estimators, we showthat loan guarantees have a positive impact on firm survival, sales, investment and employment. We compute the gross amount of public endowment needed to create an additional job, which ranges from € 2,800 to € 3,500 depending on the guarantee target.
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