The International Evidence on Discouraged Small Businesses

Sugato Chakravarty () and Meifang Xiang ()
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Meifang Xiang: University of Wisconsin-Whitewater

No 1013, Working Papers from Purdue University, Department of Consumer Sciences

Abstract: We use a unique firm-level survey database compiled by the World Bank to examine the drivers of discouraged small businesses in various developing economies around the world. We confirm that older and larger firms are less likely to be discouraged and that the level of competition and the relationships of the firms with banks have a significant impact on the probability of a firm in being discouraged. Further analysis suggests that the drivers of borrower discouragement might work differently for firms operating in relatively developed versus underdeveloped economies.

Keywords: Discouraged borrowers; Banking; Emerging markets; Credit rationing; Relationships; Adverse selection (search for similar items in EconPapers)
JEL-codes: G15 G2 O16 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2012-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Forthcoming paper in the Journal of Empirical Finance

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Related works:
Journal Article: The international evidence on discouraged small businesses (2013)
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