The Economic Impact of Public Loan Guarantees on Business Transfers: Evidence from France

This study aims to provide initial empirical answers to a question that has not yet been explored in the academic literature: the effectiveness of business transfer support measures. The study focuses on loans guaranteed by Bpifrance between 2012 and 2015 that supported the financing of business takeovers. Based on data from companies and their managers, the impact analysis focuses on companies that were acquired, matching companies sold to those taken over. The study demonstrates the positive effects on economic performance (investment, revenues, EBITDA, productivity) and on the survival of SMEs that benefited from this aid. Apart from the effect on survival, the aggregated effects on employment are not very visible over the 3-year horizon, possibly due to the high short-term financial needs for funding the businesses. The extent of the impact nevertheless appears to be greatest for managers near retirement age, an instructive result given the context of an aging population.