This paper analyzes the impact of public credit guarantee schemes on the allocation and performance of bank credit … from banks to which they have larger pre-COVID credit exposures, measured as the share of the firm’s total credit … outstanding with the bank before the shock. This effect is more pronounced for risky firms and for firms in more pandemic …

crisis. For identification, we use matched bank-firm level data, covering mainly small and medium-sized firms in Eastern …-owned banks contract their credit more during the crisis than locally-funded domestic banks do. Firms dependent on credit and with … a relationship with internationally-borrowing domestic or foreign banks suffer more in their financing and real …