The Role of Factoring in Enterprise Development: Empirical Evidence from Peru, 2015–2023

This study investigates the impact of factoring—implemented through electronic negotiable invoices—on the growth and performance of firms in Peru between 2015 and 2023. Using administrative panel data and a quasi-experimental design based on the difference-indifferences (DiD) method, the analysis compares firms that adopted this financial instrument with those that did not. The findings reveal that factoring adoption significantly increased firm survival rates. In the short term, it also enhanced access to credit, although this effect gradually diminished over time. The results on sales and employment show a heterogeneous pattern: while some firms experienced initial adverse effects, those that consistently utilized factoring reported sustained improvements. These findings contribute to the understanding of alternative financing mechanisms in developing economies and their role in fostering firm resilience and long-term development. The paper provides empirical evidence to inform financial policy and support instruments for micro, small, and medium-sized enterprises (MSMEs) in Peru.