Access to Credit and the Effect of Credit Constraints on Costa Rican Manufacturing Firms

2003 ◽  
Author(s):  
Alexander Monge-Naranjo ◽  
Luis Hall
Keyword(s):  
Credit Constraints ◽  
Manufacturing Firms ◽  
Costa Rican ◽  
Access To Credit

scholarly journals Off-farm Income, Credit Constraints, and Farm Investment

2020 ◽  
Vol 52 (4) ◽  
pp. 642-663
Author(s):  
Nigel Key
Keyword(s):  
Household Income ◽  
Credit Constraints ◽  
Limited Resource ◽  
Capital Expenditures ◽  
Farm Income ◽  
Farm Labor ◽  
Federal Programs ◽  
Net Worth ◽  
Access To Credit ◽  
Farm Investment

AbstractMany farmers face borrowing limits that depend on their household income and net worth. Given such credit constraints, an increase in off-farm income should allow farmers to borrow more, thus influencing production decisions and productivity. To test this hypothesis, the education level of the farm operator’s spouse is used to identify exogenous variation in off-farm income. Findings indicate that higher off-farm income leads to more borrowing, capital expenditures, capital input intensity, farm labor use, output, farm income, and productivity. Results suggest that Federal programs that promote access to credit for limited-resource farmers may increase farm investment and productivity.

scholarly journals Empowering Cities: Good for Growth? Evidence from the People's Republic of China

2018 ◽  
Vol 35 (1) ◽  
pp. 175-195
Author(s):  
Megha Mukim ◽  
T. Juni Zhu
Keyword(s):  
Gross Domestic Product ◽  
Local Governments ◽  
Credit Constraints ◽  
High Capacity ◽  
Economic Outcomes ◽  
Firm Level ◽  
Access To Credit ◽  
Republic Of China ◽  
Firm Outcomes ◽  
Local Leaders

This paper utilizes a countrywide process of county-to-city upgrading in the 1990s to identify whether extending the powers of urban local governments leads to better firm outcomes. The paper hypothesizes that since local leaders in newly promoted cities have an incentive to utilize their new administrative remit to maximize gross domestic product and employment, there should be improvements in economic outcomes. In fact, aggregate firm-level outcomes do not necessarily improve after county-to-city graduation. However, state-owned enterprises perform better after graduation, with increased access to credit through state-owned banks as a possible explanation. Importantly, newly promoted cities with high capacity generally produce better aggregate firm outcomes compared with newly promoted cities with low capacity. The conclusions are twofold. First, relaxing credit constraints for firms could lead to large increases in their operations and employment. Second, increasing local government's administrative remit is not enough to lead to better firm and economic outcomes; local capacity is of paramount importance.

scholarly journals Leverage and Deepening Business-Cycle Skewness

2020 ◽  
Vol 12 (1) ◽  
pp. 245-281 ◽  
Author(s):  
Henrik Jensen ◽  
Ivan Petrella ◽  
Søren Hove Ravn ◽  
Emiliano Santoro
Keyword(s):  
United States ◽  
Business Cycle ◽  
Equilibrium Model ◽  
Financial Constraints ◽  
Credit Constraints ◽  
The United States ◽  
Cycle Asymmetry ◽  
Access To Credit ◽  
Dynamic General Equilibrium Model ◽  
The Face

We document that the United States and other G7 economies have been characterized by an increasingly negative business-cycle asymmetry over the last three decades. This finding can be explained by the concurrent increase in the financial leverage of households and firms. To support this view, we devise and estimate a dynamic general equilibrium model with collateralized borrowing and occasionally binding credit constraints. Improved access to credit increases the likelihood that financial constraints become nonbinding in the face of expansionary shocks, allowing agents to freely substitute inter-temporally. Contractionary shocks, however, are further amplified by drops in collateral values, since constraints remain binding. As a result, booms become progressively smoother and more prolonged than busts. Finally, in line with recent empirical evidence, financially driven expansions lead to deeper contractions, as compared with equally sized nonfinancial expansions. (JEL D14, E23, E32, E44)

Intertemporal Consumption and Credit Constraints: Does Total Expenditure Respond to an Exogenous Shock to Credit?

2010 ◽  
Vol 100 (3) ◽  
pp. 1080-1103 ◽  
Author(s):  
Søren Leth-Petersen
Keyword(s):  
Credit Constraints ◽  
Credit Market ◽  
Market Reform ◽  
Household Expenditure ◽  
Total Expenditure ◽  
Exogenous Shock ◽  
Access To Credit ◽  
Intertemporal Consumption ◽  
Aggregate Effect ◽  
Housing Equity

There is continuing controversy over the importance of credit constraints. This paper investigates whether total household expenditure and debt is affected by an exogenous increase in access to credit provided by a credit market reform that enabled Danish house owners to use housing equity as collateral for consumption loans. We find that the magnitude of the response is correlated with the amount of equity released by the reform and that the effect is strongest for younger households. Even for this group, the response was moderate. The aggregate effect of the reform was significant but small. (JEL D14, D91, E21)

scholarly journals The Constraints of Agricultural Credit and Government Policy Strategy

2018 ◽  
Vol 215 ◽  
pp. 02008
Author(s):  
Sri Herliana ◽  
Acip Sutardi ◽  
Qorri Aina ◽  
Qonita Himmatul Aliya ◽  
Nur Lawiyah
Keyword(s):  
High Risk ◽  
Financial Institutions ◽  
Government Policy ◽  
Agricultural Sector ◽  
Credit Constraints ◽  
Price Risk ◽  
Agricultural Credit ◽  
Access To Credit ◽  
Complex Procedure ◽  
The Government

Low access to credit in the agricultural sector is also caused by problems of agricultural sector actors (especially farmers) and financial institutions. Farmers are still having difficulty in accessing credit (accessibility and unbankable) and the limited financial institutions that channel credit to the agricultural sector. Therefore, the government must issue a policy in growing the agricultural sector, especially in anticipation of access credit constraints by farmers. The agricultural sector as a high-risk business, therefore formal institutions are less interested in financing the agricultural sector on the grounds of high transaction costs, asymmetric information, low profits, lack of collateral, education of farmers is relatively low. In addition, most banks do not want to finance agriculture due to fluctuating production and uncontrolled price risk. While the constraints of the farmers in obtaining formal credit is a complex procedure, there should be collateral as well as high payment delay fees, long distances and less information about capital.

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