Bonfim, DianaRaposo, ClaraCustódio, Cláudia2022-04-042022-04-042019-10Bonfim, Diana . Clara Raposo e Cláudia Custódio .2019. “The sensitivity of SME’s investment and employment to the cost of debt financing” .Banco de Portugal. Economic and Research Department. Working Papers nº 15 | 2019.2182-0422http://hdl.handle.net/10400.5/23996We use variation in the access to a government credit certification program in Portugal to estimate the sensitivity of SMEs´ investment and employment to the cost of debt financing. Targeted firms have access to a credit certification and loan guarantees. We use a multidimensional regression discontinuity design to estimate real effects. Eligible firms increase borrowing and obtain bank loans at lower rates than non-eligible firms, allowing them to increase investment and employment during crises. Eligible firms also exhibit increased return on assets and default less. Industry-level analysis shows reduced heterogeneity in access to credit in more exposed industriesengSME FinancingCredit RatingCredit AccessCredit Certificationworking paper