Access to Finance and Job Growth: Firm-Level Evidence across Developing Countries*

Big constraints to small firms’ growth? Business environment and employment growth across firms

Meghana Ayyagari, Pedro Juarros, Maria Martinez Peria and Sandeep Singh

Review of Finance, 2021, vol. 25, issue 5, 1473-1496

Abstract: This paper investigates the effect of access to finance on job growth in over 780,000 firms across twenty-two developing countries. Using the introduction of credit bureaus as an exogenous shock to the supply of credit, the paper finds that increased access to finance results in higher employment growth, especially among micro, small, and medium enterprises. The results are robust to using firm-fixed effects, industry measures of external finance dependence, and propensity score matching. Our findings have implications for policy interventions targeted to produce job growth.

Keywords: Access to finance; Job growth (search for similar items in EconPapers)
JEL-codes: D22 G21 J21 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (8)

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Working Paper: Access to finance and job growth: firm-level evidence across developing countries (2016)
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