Local Financial Development and Firm Performance: Evidence from Morocco

Marcel Fafchamps and Matthias Schündeln

No 2011-02, CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford

Abstract: Combining data from the Moroccan census of manufcaturing enterprises with information from a commune survey, we test whether firm expansion is affected by local financial development. Our findings are consistent with this hypothesis: local bank availability is robustly associated with faster growth for small and medium-size firms in sectors with growth opportunities, with a lower likelihood of firm exit and a higher likelihood of investment. The findings also suggests a channel for the effect of the availability of financing in firm growth in our data, namely that access to credit was used to invest in labor saving technology.

Keywords: manufacturing; credit constraint; firm size (search for similar items in EconPapers)
JEL-codes: L25 O16 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-ara, nep-bec, nep-dev, nep-ent, nep-mfd and nep-mic
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Journal Article: Local financial development and firm performance: Evidence from Morocco (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:csa:wpaper:2011-02

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