Credit and investment distortions: Evidence from Mexican manufacturing

Felipe Meza, Sangeeta Pratap and Carlos Urrutia ()

Economics Letters, 2020, vol. 197, issue C

Abstract: We document a transmission channel from credit conditions to capital accumulation via investment wedges. Using a simple multi-industry model of production and investment, we measure these wedges at the 4-digit industry level from Mexican manufacturing and show that they account for most of the changes in aggregate capital over time. We also find a robust relation between the wedges and financial variables: credit and interest rates, also measured at the industry level.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176520303700
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:197:y:2020:i:c:s0165176520303700

DOI: 10.1016/j.econlet.2020.109610

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().