Bank Credit and Productivity: Evidence from Mexican Firms

Villalpando B. Mario

No 2015-06, Working Papers from Banco de México

Abstract: Based on a survey of Mexican firms, this paper provides evidence of the positive effect of bank credit on firms' productivity. This effect is larger for those firms with access to bank credit and investment opportunities than for firms that only have either investment perspectives or bank credit. The potential problem of endogeneity in the empirical estimates is addressed by using instruments -collateral and expenses on energy and telecommunications- for the main explanatory variables. The relevant parameters indicating a positive effect of bank credit to productivity are consistent between estimation techniques.

Keywords: Bank credit; labor productivity (search for similar items in EconPapers)
JEL-codes: D22 D24 (search for similar items in EconPapers)
Date: 2015-03
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Citations: View citations in EconPapers (1)

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