Firm Size and Credit in Argentina

46 Pages Posted: 24 Sep 2013

See all articles by Sebastian Auguste

Sebastian Auguste

University of Michigan at Ann Arbor - Department of Economics

Ricardo Bebczuk

Universidad Nacional de la Plata

Gabriel Sánchez

Inter-American Development Bank (IDB)

Date Written: March 2013

Abstract

The goal of this paper is to study the link between bank credit (and internal funding) and average firm size in Argentina. Besides the fact that economic growth tends to go hand in hand with larger firm size, the topic is of particular interest because of the severe credit crunch in Argentina in the aftermath of the 2001-2002 financial crisis. To this end, a novel three-digit industry-level dataset spanning the 2000-2010 period was constructed. The results confirm the expected positive impact of credit supply on average firm size. Furthermore, the study expands on common knowledge by testing the sensitivity of firm size to internal funding and the differential financing behavior of the primary and the manufacturing sector. The results do not seem to be driven by endogeneity bias.

JEL Classification: D22, D23, G21, G32

Suggested Citation

Auguste, Sebastian and Bebczuk, Ricardo and Sánchez, Gabriel, Firm Size and Credit in Argentina (March 2013). IDB Working Paper No. IDB-WP-396, Available at SSRN: https://ssrn.com/abstract=2330161 or http://dx.doi.org/10.2139/ssrn.2330161

Sebastian Auguste (Contact Author)

University of Michigan at Ann Arbor - Department of Economics ( email )

611 Tappan Street
Ann Arbor, MI 48109-1220
United States

Ricardo Bebczuk

Universidad Nacional de la Plata ( email )

7 Nº 776
Buenos Aires, BA 1900
Argentina

Gabriel Sánchez

Inter-American Development Bank (IDB)

1300 New York Avenue NW
Washington, DC 20577
United States

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