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A firm level approach on the effects of IMF programs

Pietro Bomprezzi and Silvia Marchesi

Journal of International Money and Finance, 2023, vol. 132, issue C

Abstract: This paper evaluates the effects of IMF programs at the firm level and considers the role of firm financing constraints as a channel of transmission. We examine different dimensions of a Fund program, namely participation and scope of conditionality. We find a positive effect of IMF programs on firms’ sales growth, such that average sales growth can be up to 26 percent higher in firms exposed to IMF programs, and such effect is persistent over time. We also find evidence that the firms’ financing constraint plays a role in the transmission of effects, and alleviation of these constraints improves performance. This paper, aside from providing new evidence on the effectiveness of IMF programs, brings attention to the role (and effectiveness) of official intervention, an important but under-analyzed dimension of international finance.

Keywords: IMF conditionality; IMF; Firm growth; Labor income share; Official flows (search for similar items in EconPapers)
JEL-codes: F33 O12 O19 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:132:y:2023:i:c:s0261560623000207

DOI: 10.1016/j.jimonfin.2023.102819

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