Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/89066
Authors: 
Moron, Eduardo
Salgado, Edgar
Seminario, Cristhian
Year of Publication: 
2013
Series/Report no.: 
IDB Working Paper Series IDB-WP-398
Abstract: 
This paper documents the relationship between regional financial development and firm growth in the Peruvian manufacturing sector. In order to control for mutual causality between credit availability and firm growth, industry differences in financial dependence on external funds are exploited. The 1994 and 2008 rounds of the National Economic Census are used, permitting analysis at the firm level as well as the activity level. Results suggest a significant and positive effect of financial deepening on surviving firms` growth. However, this effect is smaller for micro enterprises, suggesting that the cost of external funding decreases with financial development mainly for large firms. The conclusions remain unchanged when entering and exiting firms are included. The paper further finds that credit expansion have encouraged not only firm growth but also firm entry. The results are robust using an alternative measure of financial dependence.
JEL: 
D22
D53
G21
L11
L60
O14
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.