Economics at your fingertips  

Misallocation, Access to Finance, and Public Credit: Firm-Level Evidence

Miguel Leon-Ledesma () and Dimitris Christopoulos ()

Asian Development Review, 2016, vol. 33, issue 2, 119-143

Abstract: Using a database of 23,000 firms in 45 economies, we test the quantitative importance of access to finance and access to public and private credit for the determination of misallocation. We first derive measures of factor market and size distortions, and then use these measures within a regression framework to test the significance of self-declared access-to-finance obstacles as well as the effect of access to a credit line issued by either a government-owned or private bank. We find that access-to-finance obstacles and private credit increase the dispersion of distortions. Public credit has a very small effect. For firms that do not face financial obstacles, public credit increases the dispersion of distortions; for firms that face financial obstacles, it slightly decreases dispersion. Public credit does not appear to compensate for the distortions that exist in private credit markets. Quantitatively, however, financial variables explain a very small part of the dispersion of factor market and size distortions.

Keywords: financial access; firm level; misallocation; productivity; public credit (search for similar items in EconPapers)
JEL-codes: O40 O43 O47 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link) link to full text PDF (application/pdf)

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:

Ordering information: This journal article can be ordered from
https://mitpressjour ... rnal/?issn=0116-1105

Access Statistics for this article

Asian Development Review is currently edited by Yasuyuki Sawada and Naoyuki Yoshino

More articles in Asian Development Review from MIT Press
Bibliographic data for series maintained by Ann Olson ().

Page updated 2020-10-06
Handle: RePEc:tpr:adbadr:v:33:y:2016:i:2:p:119-143