Does financing spur small business productivity? Evidence from a natural experiment
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, Scholarly Edition
Krishnan, K; Nandy, DK; Puri, M
June 1, 2015
We analyze how increased access to financing affects firm total factor productivity (TFP) by exploiting a natural experiment following interstate banking deregulations that increased access to bank financing. We find that firms' TFP increases after their states implement these deregulations. Using a regression discontinuity approach based on the Small Business Administration's funding eligibility criteria, we show that TFP increases following the deregulations are significantly greater for financially constrained firms. Our results suggest that greater access to financing allows financially constrained firms to invest in productive projects that may otherwise not be taken up.
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Publication Date
June 1, 2015
Start / End Page
1768 / 1809
Related Subject Headings
- Finance
- 3801 Applied economics
- 3502 Banking, finance and investment
- 1502 Banking, Finance and Investment
- 1402 Applied Economics
- 1401 Economic Theory
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Krishnan, K., Nandy, D. K., & Puri, M. (2015). Does financing spur small business productivity? Evidence from a natural experiment. https://doi.org/10.1093/rfs/hhu087
Krishnan, K., D. K. Nandy, and M. Puri. “Does financing spur small business productivity? Evidence from a natural experiment,” June 1, 2015. https://doi.org/10.1093/rfs/hhu087.
Krishnan K, Nandy DK, Puri M. Does financing spur small business productivity? Evidence from a natural experiment. 2015. p. 1768–809.
Krishnan, K., et al. Does financing spur small business productivity? Evidence from a natural experiment. 1 June 2015, pp. 1768–809. Scopus, doi:10.1093/rfs/hhu087.
Krishnan K, Nandy DK, Puri M. Does financing spur small business productivity? Evidence from a natural experiment. 2015. p. 1768–1809.
DOI
Publication Date
June 1, 2015
Start / End Page
1768 / 1809
Related Subject Headings
- Finance
- 3801 Applied economics
- 3502 Banking, finance and investment
- 1502 Banking, Finance and Investment
- 1402 Applied Economics
- 1401 Economic Theory