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Finance and Development: On The Causal Effect of Access to Credit on Productivity

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dc.description.abstract In this paper, we use firm-level data to assess the causal effect of better credit conditions for long-term investment on firms’ productivity. A reform in Brazil’s major development bank decreased the borrowing rates and improved loan conditions of a subset of firms after dramatically shifting the eligibility thresholds of a subsidized interest rate program. A group of firms remained unaffected after the reform. Our empirical strategy exploits that natural experiment, which enables a fairly simple causal inference of the effect of financial frictions reductions on firms’ productivity measures. Our results suggest that, after the policy, the group of eligible firms managed to increase their relative investment rates and productivity. The aggregate productivity for the target group also increased after intervention and productivity improvements within firms drove its growth, with no significant change on the role played by firm entrance, expected to be a negative outcome of this type of policy. en
dc.title Finance and Development: On The Causal Effect of Access to Credit on Productivity en
dc.contributor.author Vaz, Paulo Henrique
dc.contributor.author Cavalcanti, Tiago
dc.date.accessioned 2018-02-20T19:23:18Z
dc.date.available 2018-02-20T19:23:18Z
dc.date.issued 2018-02-20
dc.identifier.uri http://lacer.lacea.org/handle/123456789/64649
lacea.language.supported en
dc.description Working paper
dc.language.iso en
dc.subject Access to Credit
dc.subject Productivity
dc.subject Brazil
dc.type Working Paper


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