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Bank Credit and Productivity: Evidence from Mexican Firms

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  • Villalpando B. Mario

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.

Suggested Citation

  • Villalpando B. Mario, 2015. "Bank Credit and Productivity: Evidence from Mexican Firms," Working Papers 2015-06, Banco de México.
    • Handle: RePEc:bdm:wpaper:2015-06
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    Cited by:

    1. Rosas-Martinez, Victor H., 2016. "On Monetary Policy, Unemployment, and Economic Growth," MPRA Paper 70980, University Library of Munich, Germany.

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    More about this item

    Keywords

    Bank credit; labor productivity;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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