The European Fund for Strategic Investments (EFSI): causal effects of a state lending policy

We examine the impact of a major lending programme of the European Investment Bank (EIB) on firm investment. Using a difference-in-differences design applied to a unique dataset of loan recipients, we find that EIB loans led to substantial additional growth in recipients’ fixed assets. This provides the first causal evidence on the additionality of large state investment bank loans made directly to firms. The findings highlight the potential for strategic public lending to advance policy agendas for sustainable economic growth.