Is Access to Credit a Constraint for Latin American Enterprises? An Empirical Analysis with Firm-Level Data

Andrea Presbitero and Roberta Rabellotti

No 101, Mo.Fi.R. Working Papers from Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences

Abstract: An intense process of deregulation and financial liberalization in Latin America has increased competitive pressures and led to bank restructuring and consolidation. This paper looks at firm access to credit in the region, focusing on the role of credit market structure. Using firm-level data from theWorld Bank Enterprise Survey, we find that access to bank credit is very heterogeneous. On average, smaller and less productive firms are less likely to apply for credit and more likely to be financially constrained. We also find that a high degree of bank penetration and competition are significantly correlated with a lower probability that borrowers are financially constrained. Foreign banks penetration has a negative effect on access to credit particularly in less developed and more concentrated markets, while it has a positive influence in more competitive and financially developed markets.

Keywords: announcement; bank; event study; financial crisis; rescue plan (search for similar items in EconPapers)
JEL-codes: G01 G21 N20 (search for similar items in EconPapers)
Pages: 40
Date: 2014-11
New Economics Papers: this item is included in nep-cfn, nep-lam and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:anc:wmofir:101

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