Credit Constraints, Sector Informality and Firm Investments: Evidence from a Panel of Uruguayan Firms

Nestor Gandelman and Alejandro Rasteletti

Journal of Applied Economics, 2017, vol. 20, issue 2, 351-372

Abstract: Using data on Uruguayan firms (1997–2008) this paper explores whether the extent of informality in a sector affects a firm's investment decision either directly or indirectly through a credit availability channel. The results suggest that financial restrictions affect investment decisions: a one percentage point increase in overall credit growth translates into a one half percentage point increase in investment rates. It is also found that, although there is no direct effect of informality on the firm investment decision, there is an indirect effect through the borrowing channel.

Date: 2017
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Related works:
Journal Article: Credit constraints, sector informality and firm investments: Evidence from a panel of Uruguayan firms (2017)
Working Paper: Credit constraints, sector informality and firm investments: evidence from a panel of Uruguayan firms (2013)
Working Paper: Credit Constraints, Sector Informality and Firm Investments: Evidence from a Panel of Uruguayan Firms (2013)
Working Paper: Credit Constraints, Sector Informality and Firm Investments: Evidence from a Panel of Uruguayan Firms (2013)
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DOI: 10.1016/S1514-0326(17)30016-8

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