Firm support measures, credit payment behavior, and credit risk

Arbeitspapier

This paper examines the relationship between three government support measures (debt moratorium, credit guarantee programs, and payroll subsidies) and the firm's payment behavior on loans in Colombia. To do so, we take advantage of the COVID-19 pandemic and use it as a case study. Using highly granular data at the bank-firm level and a difference-in-difference approach, we find that firms subject to debt reliefs and government guarantee programs experienced a lower probability of default while these policies were in force. Subsequently, once the programs ended, the dynamic of the payment behavior of these firms was similar to that of those untreated. On the contrary, payroll subsidies did not affect firms' payment behavior. Regarding the effect on banks' risk assessment, our results suggest that participation in relief programs provided banks with new information about debtors' risk, which could indicate unintended consequences of government support programs.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Graduate Institute of International and Development Studies Working Paper ; No. HEIDWP03-2024

Klassifikation und Themen

• Klassifikation: Wirtschaft ; General Financial Markets: Government Policy and Regulation ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Corporate Finance and Governance: Government Policy and Regulation
• Thema: firm support ; credit default ; credit risk

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Gómez, Camilo ; Rodríguez-Novoa, Daniela
• Ereignis: Veröffentlichung
• (wer): Graduate Institute of International and Development Studies
• (wo): Geneva
• (wann): 2024

Weitere Informationen

• Handle: http://hdl.handle.net/10419/283541
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ