Local Financial Development and Firm Performance: Evidence from Morocco
AbstractCombining data from the Moroccan census of manufcaturing enterprises with information from a commune survey, we test whether firm expansion is affected by local financial development. Our findings are consistent with this hypothesis: local bank availability is robustly associated with faster growth for small and medium-size firms in sectors with growth opportunities, with a lower likelihood of firm exit and a higher likelihood of investment. The findings also suggests a channel for the effect of the availability of financing in firm growth in our data, namely that access to credit was used to invest in labor saving technology.
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Bibliographic InfoPaper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2011-02.
Date of creation: 2011
Date of revision:
manufacturing; credit constraint; firm size;
Other versions of this item:
- Marcel Fafchamps & Matthias Schundeln, 2011. "Local Financial Development and Firm Performance: Evidence from Morocco," Economics Series Working Papers CSAE WPS/2011-02, University of Oxford, Department of Economics.
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-19 (All new papers)
- NEP-ARA-2011-03-19 (MENA - Middle East & North Africa)
- NEP-BEC-2011-03-19 (Business Economics)
- NEP-DEV-2011-03-19 (Development)
- NEP-ENT-2011-03-19 (Entrepreneurship)
- NEP-MFD-2011-03-19 (Microfinance)
- NEP-MIC-2011-03-19 (Microeconomics)
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