Impact assessment of subsidised loans in Hungary

Abstract

This study analyses the impact of subsidised investment loans disbursed by Exim Hungary between 2015 and 2019, the country’s export credit agency. We examine the effect of the loans on tangible assets, sales, employment and labour productivity. Matching and panel econometric methods are employed to mitigate the selection bias caused by the substantial representation of high-performing companies in the program. According to our results, investment loans increased tangible assets by 61% relative to unsubsidised companies. The higher capital level resulted in a 10% increase in the number of employees and an 8% increase in sales, but had no effect on productivity. Larger loans (relative to the company’s tangible assets) result in greater growth. Industry policy in a portfolio-theory approach