IDEAS home Printed from https://ideas.repec.org/a/cje/issued/v41y2008i2p475-500.html

Financial constraints and investment: assessing the impact of a World Bank credit program on small and medium enterprises in Sri Lanka

Author

Listed:
  • Varouj A. Aivazian
  • Eric Santor

Abstract

This paper examines the investment behaviour of a sample of small, credit-constrained firms in Sri Lanka. Using a unique panel data set, we analyze and compare the activities of two groups of small firms distinguished by their differential access to financing; one group consists of firms with subsidized loans from the World Bank, while the other group consists of firms without such subsidies. The paper shows that the program led to higher levels of investment for financially constrained firms. However, the evidence is inconclusive on whether the program improved economic efficiency.

Suggested Citation

  • Varouj A. Aivazian & Eric Santor, 2008. "Financial constraints and investment: assessing the impact of a World Bank credit program on small and medium enterprises in Sri Lanka," Canadian Journal of Economics, Canadian Economics Association, vol. 41(2), pages 475-500, May.
    • Handle: RePEc:cje:issued:v:41:y:2008:i:2:p:475-500
    DOI: 10.1111/j.1540-5982.2008.00471.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1540-5982.2008.00471.x
    Download Restriction: access restricted to subscribers
    File URL: https://libkey.io/10.1111/j.1540-5982.2008.00471.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bruhn, Miriam & Ortega Hernandez,Johan Andrey & Ruiz Ortega, Claudia, 2025. "Do Formal Loans Boost SME Performance ? Key Takeaways from a Meta-Analysis," Policy Research Working Paper Series 11140, The World Bank.
    2. Caio Piza & Tulio Antonio Cravo & Linnet Taylor & Lauro Gonzalez & Isabel Musse & Isabela Furtado & Ana C. Sierra & Samer Abdelnour, 2016. "The Impact of Business Support Services for Small and Medium Enterprises on Firm Performance in Low‐ and Middle‐Income Countries: A Systematic Review," Campbell Systematic Reviews, John Wiley & Sons, vol. 12(1), pages 1-167.
    3. Tulio Cravo & Caio Piza, 2016. "The Impact of Business Support Services for Small and Medium Enterprises on Firm Performance in Low -and Middle- Income Countries: A Meta-Analysis," IDB Publications (Working Papers) 94938, Inter-American Development Bank.
    4. Mariasole Bannò & Marika Vezzoli & Maurizio Carpita, 2011. "Disentangling the Innovation - Internalization Process Through a Structural Equation Model," ERSA conference papers ersa11p195, European Regional Science Association.
    5. Luís Abel Silva-Filho & Carlos R. Azzoni & André L. S. Chagas & Gustavo Castro, 2023. "Favorable credit to private agents and the local economies in the deprived regions of Brazil: a spatial panel analysis," Letters in Spatial and Resource Sciences, Springer, vol. 16(1), pages 1-11, December.
    6. Butler, Ines & Giuliodori, David & Guiñazu, Sebastian & Martinez Correa, Julian & Rodríguez, Alejandro, 2017. "Programas de Financiamiento Productivo a pymes, acceso al crédito y desempeño de las firmas: Evidencia de Argentina [Productive programs for SMEs, access to credit and performance of firms: evidenc," MPRA Paper 83524, University Library of Munich, Germany.
    7. Lamessa T. Abdisa & Alemu L. Hawitibo, 2021. "Firm performance under financial constraints: evidence from sub-Saharan African countries," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-17, December.
    8. Rijkers, Bob & Ruggeri Laderchi, Caterina & Teal, Francis, 2010. "Who Benefits from Promoting Small Enterprises? Some Empirical Evidence from Ethiopia," World Development, Elsevier, vol. 38(4), pages 523-540, April.
    9. Kersten, Renate & Harms, Job & Liket, Kellie & Maas, Karen, 2017. "Small Firms, large Impact? A systematic review of the SME Finance Literature," World Development, Elsevier, vol. 97(C), pages 330-348.
    10. Amarjit Gill & Craig Wilson, 2021. "Bank connections and small business performance: Evidence from Canadian survey data," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5110-5134, October.
    11. Alessandro Maffioli & Joao A. Negri & Cesar M. Rodriguez & Gonzalo Vazquez-Bare, 2017. "Themed Issue: Cash Transfers and Microfinance," Development Policy Review, Overseas Development Institute, vol. 35(5), pages 675-702, September.

    More about this item

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cje:issued:v:41:y:2008:i:2:p:475-500. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Prof. Werner Antweiler (email available below). General contact details of provider: https://edirc.repec.org/data/ceaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.