We use variation in the access to a government credit certification program estimate financial and real effects of supporting small firms. This was first implemented during global crisis, but has remained active ever since, allowing us analyze its both recessions recoveries. Eligible firms have loan guarantees quality certification. using multidimensional regression discontinuity design. find t...

Prior research has documented a ‘‘kink’’ in the earnings distribution: too few firms report small losses, too many firms report small profits. We investigate whether boosting of discretionary accruals to report a small profit is a reasonable explanation for this ‘‘kink.’’ Overall, we are unable to confirm that boosting of discretionary accruals is the key driver of the kink. We caution the use ...