CEF.UP – FIN/ECO Seminar/Webinar

Thursday – March 21^st, 2024 at 1:00 p.m. | Room 305| Online

“Information Frictions and Firm Take up of Government Support: A Randomised Controlled Experiment” 

Diogo Mendes  – Stockholm School of Economics (Sweden)

Abstract:

“This paper studies whether informational frictions prevent firms from accessing government support using a randomised controlled trial. We focus on two Portuguese COVID-19 relief programs, providing (i) wage support for workers who are kept on payroll and (ii) credit lines backed by government guarantees. We randomly assign firms to a treatment providing either simplified information about a program, or a combination information and step-by-step application support. We find a significant treatment effect on take up of the wage support program. Our results constitute direct evidence that information frictions act as a barrier to comprehensive distribution of firm-level support measures.”