Table 2

# Probability of Firms Using Public Programs

|||Credit Progr<br>|am<br>|Employment Program<br>|Both Programs<br>|
|---|---|---|---|---|---|
||(1)<br>|(2)<br>|(3)<br>|(4)<br>|(5)<br>|
||Use|Applications|Approvals|Use|Use|
|_Panel A: Analysis using Predicted Default Risk_||||||
|Risk|0.343<br>|0.547<br>|-0.264<br>|-0.020<br>|0.047<br>|
||(0.034)|(0.035)|(0.022)|(0.024)|(0.018)|
|Increase in Sales Dummy|0.195|0.187|0.014|0.053|0.064|
||(0.008)|(0.008)|(0.006)|(0.007)|(0.006)|
|Decrease in Sales Dummy|0.193|0.190|0.014|0.112|0.102|
||(0.008)|(0.007)|(0.006)|(0.007)|(0.006)|
|Use Employment Program|0.095|0.117|-0.009|||
||(0.005)|(0.005)|(0.004)|||
|Use Credit Program||||0.056||
|||||(0.003)||
|Dependent Variable Mean|0.505|0.656|0.913|0.185|0.111|
|Dependent Variable Std. Dev.|0.500|0.475|0.281|0.389|0.315|
|Number of Firms<br>|62,894|62,859|36,609|62,128|61,446|
|R<sup>2</sup><br>|0.045<br>|0.063<br>|0.030<br>|0.081<br>|0.066<br>|
|Industry FE|Yes|Yes|Yes|Yes|Yes|
|Municipality FE|Yes|Yes|Yes|Yes|Yes|
|_Predicted Default Probability_||||||
|Firms with Previous Loans|0.084|0.084|0.090|0.084|0.084|
|_Panel B: Analysis Using Spread_||||||
|Spread _Ex Ante_|0.001|0.002|-0.002|-0.001|-0.001|
||(0.001)|(0.001)|(0.000)|(0.000)|(0.000)|
|Increase in Sales Dummy|0.204|0.176|0.018|0.062|0.072|
||(0.010)|(0.009)|(0.008)|(0.010)|(0.009)|
|Decrease in Sales Dummy|0.204|0.183|0.014|0.125|0.115|
||(0.010)|(0.008)|(0.008)|(0.009)|(0.009)|
|Use Employment Program|0.091|0.103|-0.009|||
||(0.006)|(0.006)|(0.004)|||
|Use Credit Program||||0.058<br>(0.004)||
|Dependent Variable Mean|0.573|0.729|0.910|0.199|0.132|
|Dependent Variable Std. Dev.|0.495|0.445|0.286|0.399|0.338|
|Number of Firms|38,348|38,250|24,514|37,531|37,140|
|R<sup>2</sup>|0.048|0.068|0.032|0.086|0.071|
|Industry FE|Yes|Yes|Yes|Yes|Yes|
|Municipality FE|Yes|Yes|Yes|Yes|Yes|
|_Predicted Default Probability_||||||
|Firms with Previous Loans|0.107|0.107|0.107|0.106|0.106|

This table reports probit estimations of the probability of a firm with previous loans using a government program on a set of firm-level characteristics. Panel A defines risk using the predicted default probability from the default probability model reported in Table 1, Column 8; Panel B defines risk using the spread between the interest rate of the loans a firm received and the risk-free rate. Firms with previous loans are those that either have bank credit outstanding in December 2019 or receive a bank loan over the period 2012–2019. In Column 1, the dependent variable is equal to one if the firm participates in the credit program and zero otherwise, in Column 2, the dependent variable is equal to one if the firm applies to the program and zero otherwise, in Column 3 the dependent variable is equal to one if the firm’s loan application is approved and zero otherwise, in Column 4 is equal to one if the firm participates in the employment program, in Column 5 is equal to one if the firm participates in both programs, and is zero otherwise. Increase (decrease) in sales dummy is equal to one if sales growth is greater (lower) than or equal to 2% (-2%), and zero if sales growth is between -2% and 2%. Use credit program and employment program are dummy variables equal to one for program participation and is zero otherwise. Use both programs is a dummy variable equal to one for credit and employment program participation, and is zero otherwise. The table uses the firms with previous loans of the credit program eligible firms sample. Some observations are dropped when estimating the model with fixed effects. Standard errors, shown in parentheses, are clustered at the industry and municipality level.

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