Entrepreneur Education and Firm Credit Outcomes

Yusuf Emre Akgunduz, Abdurrahman Aydemir and Halil Ibrahim Aydin

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: We estimate the causal effects of entrepreneur education on credit outcomes. We link credit and business registries and identify the effects of education on access to credit, loan terms and default using a compulsory schooling reform implemented in Türkiye. More educated cohorts have higher access to credit, receive 3.3 percent larger loans and pay 0.23 percentage points lower interest rates compared to less educated cohorts despite no differences in borrowers' creditworthiness. We test alternative explanations for our findings and conclude that education reduces credit search costs and enables borrowers to shop around banks for better loan terms.

Keywords: Compulsory schooling; Entrepreneurship; Bank loans (search for similar items in EconPapers)
JEL-codes: G21 I25 O16 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-ara, nep-cfn, nep-ent, nep-sbm and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:tcb:wpaper:2301

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