A new research paper from Fabio Bertoni, professor of Finance at emlyon business school, joint with Anita Quas (University of Milan) and Massimo Colombo (Politecnico di Milano), shows that SMEs that receive funding from the EU through European Investment Fund (EIF) guaranteed loans, drastically outperform those that don’t. We spoke with Fabio Bertoni about the research project, its findings and the impact they have for the EIF and SMEs.
Why don’t we start with the inception of this research project. What were the reasons and motivations behind looking into these loans specifically and their impact?
Anita, Massimo and myself were contacted by the European Court of Auditors to look into the impact of EIF guaranteed loans on SMEs in France. The EU-guaranteed loan scheme is one of EIF’s most important measures.
These loans aim at facilitating banks investing in SMEs. The EIF guarantee is a security buffer, ensuring banks have a limited downside on the loans they grant to SMEs, which makes them more willing to take on the loans in the first place.
According to previous research, 85% of new EU jobs are created by SMEs – so the EU obviously wants to invest in schemes that facilitate the growth of SME. Our study measures the extent to which guaranteed loans are effective in doing that. […]
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I am professor of corporate finance and associate dean for research. My research activity is mostly focused on the relationship between financing and firm performance. I have devoted particular attention to the effect of venture capital, leverage buyouts and guaranteed loans on firms’ growth, patenting and investment. I have also studied sovereign wealth fund asset allocation and the effect of sovereign wealth fund investment on credit risk.
- Bertoni F., Colombo M. G. & Quas A. (2018). “The effects of EU-funded guarantee instruments of the performance of small and medium enterprises: Evidence from France,” EIF Working Paper Series 2018/52, European Investment Fund (EIF).
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