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Economy-Wide Effects of Improving Small Firms Access to Capital Markets: An Applied General Equilibrium Assessment


  • Omar O. Chisari

    () (Instituto de Economía UADE and CONICET)

  • Carlos Adrián Romero

    () (Instituto de Economía UADE)

  • Juan Pablo Vila Martínez

    () (Departamento de Economía y Finanzas UADE)


Is it possible to increase GDP, reduce unemployment and improve income distribution by giving small firms better access to capital markets? This paper argues that an answer to that question could be affirmative. However, it also shows that self-exclusion of small firms from programs of access to capital markets conditional on higher formalization is a plausible scenario. Formalization could be expensive for them in terms of higher effective taxes and costs of compliance with norms and standards. The paper gives also estimates of the required gains in productivity that could induce firms to become more formal and access the capital markets at a lower cost of capital. To address those issues we use a general equilibrium approach for the Argentine economy to have the economy wide impacts and costs, i.e. including the effect on other sectors of the reallocation of resources to small firms.

Suggested Citation

  • Omar O. Chisari & Carlos Adrián Romero & Juan Pablo Vila Martínez, 2016. "Economy-Wide Effects of Improving Small Firms Access to Capital Markets: An Applied General Equilibrium Assessment," Revista de Analisis Economico – Economic Analysis Review, Universidad Alberto Hurtado/School of Economics and Business, vol. 31(1), pages 15-36, April.
  • Handle: RePEc:ila:anaeco:v:31:y:2016:i:1:p:15-36

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    Small business; applied general equilibrium; access to capital markets;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean


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