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Bank Credit and Productivity: Evidence from Mexican Firms

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  • Mario Villalpando

    (Banco de México)

Abstract

Abstract Using a recent survey of Mexican firms, this paper provides empirical evidence for the hypothesis that bank credit improves the productivity of firms with investment opportunities. On overage, firms whit access to bank credit and investment opportunities are 50 percents more productive than other firms. Bank credit and investment opportunities are instrumented by firms¥collateral and spending on utilities to overcome potential biases of OLS estimates. The results are consistent with both OLS and IV estimates. Resumen Con base en una encuesta reciente de empresas mexicanas, en este articulo presenta evidencia empírica que favorece la hipótesis de que el crédito bancario promueve la productividad de las empresas. En promedio, las empresas con acceso al crédito bancario y oportunidades de inversión son 50 por ciento más productivas que otro tipo de empresas. Para evitar problemas de sesgo en los parámetros de mínimos ordinarios cuadrados (MCO), las variables de crédito bancario y oportunidades de inversión son instrumentadas por las garantías y gasto en servicios de energía y comunicaciones de las empresas. Los resultados son consistentes independientemente si son estimados con MCO o variables instrumentales.Length: 19 pages

Suggested Citation

  • Mario Villalpando, 2014. "Bank Credit and Productivity: Evidence from Mexican Firms," Remef - The Mexican Journal of Economics and Finance, Instituto Mexicano de Ejecutivos de Finanzas. Remef, October.
  • Handle: RePEc:imx:journl:201410112
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    References listed on IDEAS

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    Cited by:

    1. Skott, Peter & Gómez-Ramírez, Leopoldo, 2018. "Credit constraints and economic growth in a dual economy," Structural Change and Economic Dynamics, Elsevier, vol. 45(C), pages 64-76.

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