The sensitivity of SME’s investment and employment to the cost of debt financing

We use variation in the access to a government credit certification program Portugal estimate sensitivity of SMEs investment and employment cost debt financing. Targeted firms have loan guarantees. multidimensional regression discontinuity design real effects. Eligible increase borrowing obtain bank loans at lower rates than non- eligible firms, allowing them during crises. also exhibit increased return on assets default less. Industry-level analysis shows reduced heterogeneity more exposed industries.