The effect of size and productivity on borrowing discouragement for small firms in Colombia
I estimate the effect micro firms’ size and productivity have on the probability of becoming a discouraged borrower: firms that do not use credit from the formal financial system despite needing it. I also estimate the effect that size and productivity have on the probability of becoming accepted in...
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| Format: | Article |
| Language: | English |
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Elsevier
2022-12-01
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| Series: | Latin American Journal of Central Banking |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S266614382200031X |
| Summary: | I estimate the effect micro firms’ size and productivity have on the probability of becoming a discouraged borrower: firms that do not use credit from the formal financial system despite needing it. I also estimate the effect that size and productivity have on the probability of becoming accepted in the event of a formal credit request. Using a trivariate probit model that corrects for selection biases, I find that productivity and size (number of employees) reduce the likelihood of becoming discouraged. Both variables are related to a higher probability of being accepted in formal credit requests. |
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| ISSN: | 2666-1438 |