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Government financial assistance as catalyst for private financing

Main content area
Staff research paper 6/2019
Publication Date: 
June 2019

This research paper investigates whether government financial assistance facilitates Australian business’ access to external financing. It finds that firms that receive government assistance are more likely to apply for and receive debt or equity financing.

Key points:

  • government financial assistance makes firms more likely to apply for financing
  • government financial assistance also makes firms more likely to obtain financing once they apply
  • government assistance substantially improves the chances for young small firms to secure financing for innovation
  • subsidies and rebates increase chances of financing
  • tax concessions only increase chances of financing for innovative firms

Author: Sasan Bakhtiari

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