Skip to main content

Does financing spur small business productivity? Evidence from a natural experiment

Publication ,  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.

Duke Scholars

Altmetric Attention Stats
Dimensions Citation Stats

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
 

Citation

APA
Chicago
ICMJE
MLA
NLM
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., 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.

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