Credit Constraints and Investment in Human Capital: Training Evidence from Transition Economies

53 Pages Posted: 8 Nov 2013

Date Written: October 30, 2013

Abstract

Using a unique survey database of 8265 firms from 25 transition economies, I find that lack of access to finance in general, and to bank credit in particular, is associated with significantly lower investment in on-the-job training. This effect is stronger in education-intensive industries and in industries facing good global growth opportunities. To address endogeneity issues, I use the structure of local credit markets as an instrument for credit constraints at the firm-level. In addition, in panel estimates, I control for the presence of unobserved firm-level heterogeneity, as well as for changes in macroeconomic conditions.

Keywords: credit constraints, human capital, on-the-job training

JEL Classification: G10, J21, J24, M53

Suggested Citation

Popov, Alexander A., Credit Constraints and Investment in Human Capital: Training Evidence from Transition Economies (October 30, 2013). ECB Working Paper No. 1606, Available at SSRN: https://ssrn.com/abstract=2347445 or http://dx.doi.org/10.2139/ssrn.2347445

Alexander A. Popov (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
100
Abstract Views
622
Rank
479,249
PlumX Metrics