eprintid: 10203798
rev_number: 19
eprint_status: archive
userid: 699
dir: disk0/10/20/37/98
datestamp: 2025-03-14 08:31:52
lastmod: 2025-03-14 08:31:52
status_changed: 2025-03-14 08:31:52
type: thesis
metadata_visibility: show
sword_depositor: 699
creators_name: Frayman, David
title: Do public loans matter: measuring allocation,
additionality and heterogeneity
ispublished: unpub
divisions: UCL
divisions: B04
divisions: C04
divisions: DF7
note: Copyright © The Author 2025. Original content in this thesis is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International (CC BY-NC 4.0) Licence (https://creativecommons.org/licenses/by-nc/4.0/).  Any third-party copyright material present remains the property of its respective owner(s) and is licensed under its existing terms.  Access may initially be restricted at the author’s request.
abstract: Despite the scale of finance disbursed to firms annually, public lending has
received only modest empirical attention. Existing work has examined the
effects of de-risking interventions that support private lending, and not the
larger share of public lending that is made directly to firms. As a result, we
have an imprecise picture of where finance goes and minimal evidence about
its effects on the firms that receive it. This thesis addresses this gap in relation
to a major programme of public lending in the European Union (the European
Fund for Strategic Investments (EFSI)). It examines who and what was
financed by loans, whether they induced firms to make additional investments,
and the interaction between these things (how did policy effects vary). This
relied on the collection from original loan documentation of a unique dataset
on the recipients and investments financed. It finds evidence that the policy
goals of generating additional private investment and directing investment towards
societal challenges, notably the climate crisis, were successful. Using a
difference-in-differences approach that locates control firms who follow similar
dynamics of investment demand, the additionality of large public loans is
estimated for the first time. Their effect on firm investment is very notable
– an estimated additional growth in fixed assets of approximately 12 percentage
points as a result of receiving a loan under EFSI. This shows loans were
not merely substitutes for private finance, and is evidence of constraints on
long-term borrowing amongst large firms that can be attributed to maturity
rationing. This thesis also provides entirely novel evidence on heterogeneity
in the effects of public lending. This did not conform to theoretical expectations,
and there is some suggestive evidence of a potential trade-off between
the societal and economic goals of public lending.
date: 2025-01-28
date_type: published
full_text_type: other
thesis_class: doctoral_embargoed
thesis_award: Ph.D
language: eng
verified: verified_manual
elements_id: 2354400
lyricists_name: Frayman, David
lyricists_id: DMFRA02
actors_name: Frayman, David
actors_id: DMFRA02
actors_role: owner
full_text_status: restricted
pages: 201
institution: UCL (University College London)
department: Institute for Innovation and Public Purpose
thesis_type: Doctoral
citation:        Frayman, David;      (2025)    Do public loans matter: measuring allocation, additionality and heterogeneity.                   Doctoral thesis  (Ph.D), UCL (University College London).    
 
document_url: https://discovery.ucl.ac.uk/id/eprint/10203798/1/Frayman_10203798_Thesis.pdf
document_url: https://discovery.ucl.ac.uk/id/eprint/10203798/2/Frayman_%2010203798_Thesis_Appendices.pdf