Skip Global Navigation
IDB Home > Research & Data
Comment Tool Comment
Comment Tool Comment

Your comment for this page:






Share Tool Share
close Share Tool Share

Small%20Is%20Not%20Beautiful%3A%20Firm%2DLevel%20Evidence%20of%20the%20Link%20between%20Credit%2C%20Firm%20Size%20and%20Competitiveness%20in%20Colombia

Working Papers

Small Is Not Beautiful: Firm-Level Evidence of the Link between Credit, Firm Size and Competitiveness in Colombia


Code:IDB-WP-395

Author(s):

Published: April 2013

Language: English

Download file in:
English

Related topics:
Finance

Abstract:

Credit has been found to be a catalyst for economic growth, as it spurs investment, enhances productivity, allows costs to be spread out over time, improves resource allocation, and enables investors to cope better with macroeconomic volatility. Most studies focus on the relationship between financial development and growth at the country level, while few analyze the relationship at the firm level. Using a panel-shaped firm-level dataset of Colombian firms and employing the methodology developed by Love and Zicchino (2006), this paper examines whether the response of firms to financial and real shocks varies according to firm size and across different levels of firm productivity. The study finds that financial shocks have a significant positive impact on firm growth, which is larger for larger firms and more productive firms that export. The results indicate that something is preventing smaller firms from taking full advantage of access to external financing.

 

Related Research by JEL Codes:
(or click here to find research by JEL Codes)

  • Credit Constraints and Investment in Latin America
    Books
    B-606 - September 2003

    What happens to firms in the face of financial crises? Little research has been done on the microeconomic implications of financial policies and crises while attention has been focused on the macroeconomic effects of these events. This book attempts to fill this research gap. Credit Constraints and Investment in Latin America contains new evidence on the nature, extent, evolution and consequences ... (View publication)

  • Inflation Targeting and Financial Stability A Perspective from the Developing World
    Monograph
    IDB-MG-175 - January 2014

    This study discusses recent experiences with inflation targeting (IT), the challenges that it faces since the global financial crisis, and ways to address them. The discussion is conducted from the perspective of upper middle-income countries. As background for the analysis, the study first provides a review of financial systems in middle-income countries or MICS (with a focus on the role of bank ... (View publication)

  • Impact Evaluation of Innovation and Linkage Development Programs in Costa Rica: The Cases of PROPYME and CR Provee
    Working Papers
    IDB-WP-461 - December 2013

    This paper estimates the impact of two productive development programs (PDPs) in Costa Rica: PROPYME and CR Provee. The first seeks to increase the capacity of small and medium-sized firms (SMEs) to innovate, and the second aims to increase backward linkages between Costa Rican SMEs and multinational companies operating in the country. The impacts of each program were measured in terms of three re ... (View publication)

© 2014 Inter-American Development Bank - All Rights Reserved.