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Credit constraints and investment in human capital: Training evidence from transition economies

  • Popov, Alexander

Using a unique survey database of 8265 firms from 25 transition economies, I find that lack of access to finance in general, and to bank credit in particular, is associated with significantly lower investment in on-the-job training. This effect is stronger in education-intensive industries and in industries facing good global growth opportunities. To address endogeneity issues, I use the structure of local credit markets as an instrument for credit constraints at the firm-level. In addition, in panel estimates, I control for the presence of unobserved firm-level heterogeneity, as well as for changes in macroeconomic conditions.

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Article provided by Elsevier in its journal Journal of Financial Intermediation.

Volume (Year): 23 (2014)
Issue (Month): 1 ()
Pages: 76-100

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Handle: RePEc:eee:jfinin:v:23:y:2014:i:1:p:76-100
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622875

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