Professor Cláudia Custódio explores how government-backed credit guarantees affect SME growth, employment, and productivity, drawing on evidence from Portugal’s SME Leader programme.
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We look forward to seeing you on Wednesday 4 February!
Imperial Inaugurals are term-time lectures that celebrate our newest Professors, recognising their academic journey and showcasing their research.
Abstract
Small and medium-sized enterprises (SMEs) are the backbone of most world economies, driving innovation, employment, and local development. Yet, their growth is often constrained by limited access to external finance, constraints that become particularly binding during economic downturns. Governments around the world have therefore devoted substantial resources to supporting SMEs through different programs programmes, especially in times of crisis such as the great recession, or the COVID-19 pandemic. But how effective are these interventions in sustaining real economic activity? Do they help viable firms grow, or instead keep unproductive ones afloat?
This lecture presents the real effects of government-backed credit guarantees using a unique natural experiment from Portugal’s SME Leader programme. This initiative provides both a public credit certification and access to guaranteed loans under preferential conditions. Its complex, multi-criteria eligibility rules allow to exploit quasi-random variation to study causal effects on firm outcomes. Drawing on rich administrative and survey data, the lecture examines how improved access to finance affects firms’ investment, employment, and export performance, especially during recessions when such support may matter most.
Cláudia Custódio is Professor of Finance at Imperial College London. Her research focuses on corporate finance, and the interplay between financial frictions and firm behaviour. In this inaugural lecture, she will discuss how targeted credit guarantees can shape firm dynamics, exploring their impact on investment and employment, the mechanisms underlying export growth, and the potential implications for aggregate productivity and policy design. She will also unveil new research projects that extend her agenda.
Biography
Claudia Custodio is a Professor of Finance at Imperial College London.
She was awarded her PhD from the London School of Economics in 2010. She is a research associate at ECGI and a CEPR research fellow. After graduating, Claudia spent time in the US working within the Department of Finance at the W. P. Carey School of Business, Arizona State University and in her native Lisbon, at NOVA school of Business and Economics. Claudia’s research focus is Corporate Finance.
