The Resource Do firms want to borrow more? : testing credit constraints using a directed lending program, Abhijit Banerjee [and] Esther Duflo

Do firms want to borrow more? : testing credit constraints using a directed lending program, Abhijit Banerjee [and] Esther Duflo

Label
Do firms want to borrow more? : testing credit constraints using a directed lending program
Title
Do firms want to borrow more?
Title remainder
testing credit constraints using a directed lending program
Statement of responsibility
Abhijit Banerjee [and] Esther Duflo
Creator
Contributor
Provider
Subject
Language
eng
Summary
This paper uses variation in access to a targeted lending program to estimate whether firms are credit constrained. The basic idea is that while both constrained and unconstrained firms may be willing to absorb all the directed credit that they can get (because it may be cheaper than other sources of credit), constrained firms will use it to expand production, while unconstrained firms will primarily use it as a substitute for other borrowing. We apply these observations to firms in India that became eligible for directed credit as a result of a policy change in 1998, and lost eligibility as a result of the reversal of this reform in 2000. Using firms that were already getting this kind of credit before 1998, and retained eligibility in 2000 to control for time trends, we show that there is no evidence that directed credit is being used as a substitute for other forms of credit. Instead the credit was used to finance more production-there was a large acceleration in the rate of growth of sales and profits for these firms. We conclude that many of the firms must have been severely credit constrained, and that the marginal rate of return to capital was very high for these firms. Keywords: Banking, Credit Constraints, India. JEL Classifications: O16, G2
Member of
Cataloging source
MYG
http://library.link/vocab/creatorName
Banerjee, Abhijit V
Illustrations
illustrations
Index
no index present
Literary form
non fiction
Nature of contents
  • dictionaries
  • bibliography
  • technical reports
http://library.link/vocab/relatedWorkOrContributorDate
1972-
http://library.link/vocab/relatedWorkOrContributorName
  • Massachusetts Institute of Technology
  • Internet Archive
  • Duflo, Esther
Series statement
Working paper series / Massachusetts Institute of Technology, Dept. of Economics
Series volume
working paper 02-25, 2008 revision
http://library.link/vocab/subjectName
  • Commercial credit
  • Bank loans
  • Credit control
  • Commercial credit
  • Bank loans
  • Credit control
  • Bank loans
  • Commercial credit
  • Credit control
  • India
Label
Do firms want to borrow more? : testing credit constraints using a directed lending program, Abhijit Banerjee [and] Esther Duflo
Instantiates
Publication
Note
"May 2002. Revised: May 2008."
Bibliography note
Includes bibliographical references (p. 42-43)
Carrier category
volume
Carrier category code
nc
Carrier MARC source
rdacarrier
Content category
text
Content type code
txt
Content type MARC source
rdacontent
Dimensions
28 cm.
Dimensions
unknown
Edition
Rev.
Extent
43, [11] pages
Media category
unmediated
Media MARC source
rdamedia
Media type code
n
Other physical details
illustrations
Specific material designation
remote
System control number
  • (OCoLC)670238666
  • (OCoLC)ocn670238666
Label
Do firms want to borrow more? : testing credit constraints using a directed lending program, Abhijit Banerjee [and] Esther Duflo
Publication
Note
"May 2002. Revised: May 2008."
Bibliography note
Includes bibliographical references (p. 42-43)
Carrier category
volume
Carrier category code
nc
Carrier MARC source
rdacarrier
Content category
text
Content type code
txt
Content type MARC source
rdacontent
Dimensions
28 cm.
Dimensions
unknown
Edition
Rev.
Extent
43, [11] pages
Media category
unmediated
Media MARC source
rdamedia
Media type code
n
Other physical details
illustrations
Specific material designation
remote
System control number
  • (OCoLC)670238666
  • (OCoLC)ocn670238666

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