Small and medium-sized enterprises (SMEs) have difficulties in accessing finance because of information asymmetry and a lack of collateral. A credit guarantee scheme is a suitable method to unlock lending to SMEs; however, it involves SMEs paying a fee, which needs to account for their risk. The...

Small and medium-sized enterprises (SMEs) have difficulties in accessing finance because of information asymmetry and a lack of collateral. A credit guarantee scheme is a suitable method to unlock lending to SMEs; however, it involves SMEs paying a fee, which needs to account for their risk. The...

We introduce credit frictions motivated by moral hazard in a general equilibrium model of international trade with two dimensions of heterogeneity and endogenous investments. Firms' competitiveness consists of capabilities to conduct process and quality innovations at low costs, whereas...

This paper develops a new international trade model with capital market imperfections and endogenous borrowing costs in general equilibrium. A key element of our model is that firm heterogeneity arises from the interaction of credit constraints at the firm-level with financial frictions at the...

Germany's bank-based financial system provides a high level of financial inclusion, measured by bank outreach and use of financial services. However, the most vulnerable individuals and small enterprises in Germany tend to be excluded or credit constrained. The quality of financial inclusion is...

We study the effects of the reform of the system of severance payments (TFR) of Italian employees on the cost and the access to credit for small and medium-size enterprises (SMEs). The most direct consequence of the reform is to reduce in the long run the amount of liquid assets available to...

We study the effects of a unique lending program initiated by the Swedish government at the height of the financial crisis that allowed firms to suspend payment of all labor-related taxes and fees. Comprehensive administrative data on all Swedish firms show that firms borrowing from the program...

We exploit historical and contemporaneous variation in local credit markets across Russia to identify the impact of credit constraints on firm-level innovation. We find that access to bank credit helps firms to adopt existing products and production processes that are new to them. They introduce...