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korean management review - Vol. 55, No. 1
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korean management review - Vol. 54, No. 6, pp. 1679-1712
Abbreviation: kmr
ISSN: 1226-1874 (Print)
Print publication date 31 Dec 2025
Received 02 Jul 2025 Revised 15 Aug 2025 Accepted 06 Sep 2025
DOI: https://doi.org/10.17287/kmr.2025.54.6.1679

The Impact of Korea Credit Guarantee Fund’s Value-up Program on SME Employment and Growth: An Evaluation Using PSM-DID Methodology
Hong-jin Jang ; Soo-lim Kim ; Sung-il Kang
(First Author) Ph.D. Candidate, Department of Urban Big Data Convergence, University of Seoul (hazelnuttree@naver.com)
(Co-Author) Assistant Manager, Corporate Restructuring Department, Korea Credit Guarantee Fund (forest@kodit.co.kr)
(Corresponding Author) Ph.D. Candidate, Department of Business Consulting, Daejeon University (ryan.kang79@gmail.com)

장홍진 ; 김수림 ; 강성일
(주저자) 서울시립대학교
(공저자) 신용보증기금
(교신저자) 대전대학교

Copyright 2025 THE KOREAN ACADEMIC SOCIETY OF BUSINESS ADMINISTRATION
This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted, distribution, and reproduction in any medium, provided the original work is properly cited.
Abstract

This study addresses the research question: “What are the causal effects of proactive restructuring programs on SME employment and financial performance?” We empirically analyze the effects of Korea Credit Guarantee Fund’s Value-up Program on employment and financial performance of small and medium-sized enterprises (SMEs). The Value-up Program represents a proactive approach to corporate restructuring, intervening before firms face severe financial distress, in contrast to traditional ex-post restructuring that occurs after insolvency has materialized.

This study employed PSM-DID methodology combining Propensity Score Matching (PSM) and Difference-in-Differences (DID) for 2,085 SMEs with consecutive financial statements from 2019 to 2024. Through this approach, we controlled for selection bias due to both observable characteristics and unobservable time-invariant characteristics to estimate the pure treatment effect of the Value-up Program. The analysis sample consisted of 97 companies that participated in the 2021 Value-up Program (treatment group) and 1,988 companies selected as preliminary candidates but did not participate (control group).

The analysis results showed that the Value-up Program had a strong effect on SME job creation, with significant employment increases of 20.66% (p<0.05) in PSM analysis and 13.4% (p<0.05) in PSM-DID analysis. In terms of sales growth, PSM-DID analysis showed a significant improvement of 17.2% (p<0.01). Among profitability indicators, ROA increased by 1.30%p (p<0.05), showing significant improvement, while operating margin and ROE did not achieve statistical significance. Additionally, insolvency risk analysis confirmed a significant prevention effect of 4.8%p (p<0.01) based on ATE. Robustness tests including parallel trend assumption tests and placebo tests yielded consistent results, ensuring the reliability of the analysis.

This study contributes to the literature by providing the first empirical evidence on the effectiveness of proactive restructuring policies in the Korean context. Our findings suggest that early intervention through the Value-up Program generates positive employment and growth effects, though the comparison is limited to firms within the pre-selected candidate pool. The results highlight the importance of considering employment effects in SME support policy design and evaluation. However, as the analysis was conducted during the program support period, long-term effects after program completion remain to be examined in future research.

Keywords: Korea Credit Guarantee Fund, Value-up Program, PSM-DID, SME Policy Effect, Job Creation
Acknowledgments

This study is based on research presented at the Korea Money and Finance Association Annual Conference in June 2025 (“The Impact of Korea Credit Guarantee Fund’s Value-up Program on SME Employment and Growth: PSM-DID Methodology Evaluation”). The authors acknowledge the valuable comments and suggestions received from conference participants. This research was conducted with the approval and support of Korea Credit Guarantee Fund, and all data usage complies with institutional policies and research ethics guidelines. The core research activities including literature review, in-depth analysis, and manuscript drafting were conducted by the authors, while generative AI tools (Claude 4.1 Opus and 4.0 Sonnet) were utilized to improve written expression.

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∙ The author Hong-jin Jang is currently completing his Ph.D. in Urban Big Data Convergence at University of Seoul. He graduated from Korea University with a degree in Statistics and obtained an MBA from Sogang University. He currently serves as the Director of AI Innovation Center at Korea Credit Guarantee Fund. His research interests include SME credit evaluation model development, count data statistical analysis, and causal inference methodologies.

∙ The author Soo-lim Kim graduated from Ewha Womans University with a degree in Political Science and International Relations and currently works as an Assistant Manager in the Corporate Restructuring Department at Korea Credit Guarantee Fund. Drawing on her practical experience at the Restructuring Improvement Team in the Re-Start Support Division, she is currently responsible for planning and operating proactive restructuring programs such as Build-up and Value-up programs and re-start support programs at the Re-leap Growth Team.

∙ The author Sung-il Kang currently serves as Deputy Director General in the Corporate Restructuring Department at Korea Credit Guarantee Fund and is pursuing a Ph.D. in Business Consulting (Global Business Management) at Daejeon University. He graduated from University of Seoul with a degree in Urban Administration and obtained a Master’s degree in Public Policy (Public Finance and Social Policy) from KDI School of Public Policy and Management. Since joining Korea Credit Guarantee Fund in 2004, he has accumulated over 20 years of practical experience in SME financial support and guarantee operations, performing various roles including corporate evaluation, guarantee business strategic planning, restructuring, and reentrepreneurship support. He currently serves as a committee member of the Central Asset Building Fund Management Committee at Korea Self-Sufficiency Welfare Development Institute and the Youth Credit Union Promotion Committee. His research interests include dynamic capabilities, entrepreneurship, startup performance, innovation capabilities, and sustainable management. He has published numerous papers in journals including the Korean Journal of Technology Innovation, Asia Pacific Journal of Small Business, and Journal of SME Finance.

 
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