Informality and Bank Credit : Evidence from Firm-Level Data.

By: Koeda, JunkoContributor(s): Dabla-Norris, EraMaterial type: TextTextSeries: IMF Working PapersPublisher: Washington : International Monetary Fund, 2008Copyright date: ©2008Description: 1 online resource (39 pages)Content type: text Media type: computer Carrier type: online resourceISBN: 9781451914092Subject(s): Bank loans -- Econometric models | Business enterprises -- Finance -- Econometric models | Informal sector (Economics) -- Econometric modelsGenre/Form: Electronic books.Additional physical formats: Print version:: Informality and Bank Credit : Evidence from Firm-Level DataDDC classification: 332.1753 LOC classification: HG1641 -- .D33 2008ebOnline resources: Click to View
Contents:
Intro -- Contents -- I. Introduction -- II. Analytical Framework -- III. Empirical Strategy and Results -- A. Empirical Model -- B. Data and Summary Statistics -- C. Empirical Results -- D. Robustness Tests -- IV. Conclusions -- References -- Tables -- 1. Summary Statistics -- 2. Correlation Matrix -- 3. Baseline Regression -- 4. Access to Credit and Informality: Impact of Business Environment -- 5. Informality, Access to Credit, and Business Environment: Interaction Effects -- 6. Access to Credit and Informality: Impact of Institutional Development -- 7. Informality, Access to Credit, and Business Environment: Interaction Effects -- 8. Extended Regressions: Firm Transparency and Performance -- 9. Interaction Regressions: Informality, Firm Transparency, and Firm Performance -- 10. Instrumental Variables Regression -- Appendices -- I. Solving the Model -- II. Countries in the Sample -- III. Variables and Sources.
Summary: The paper relies on a firm-level data on transition economies to examine the relationship between informality and bank credit. We find evidence that informality is robustly and significantly associated with lower access to and use of bank credit. We also find that higher tax compliance costs reduce firms' reliance on bank credit, while a stronger quality of the legal environment is associated with higher access to credit even for financially opaque informal firms. An interactive term between a country-wide measure of tax compliance costs and the level of informal activity is negative and significant, suggesting that the negative association between informality and bank credit is stronger in countries with weak tax administration.
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Intro -- Contents -- I. Introduction -- II. Analytical Framework -- III. Empirical Strategy and Results -- A. Empirical Model -- B. Data and Summary Statistics -- C. Empirical Results -- D. Robustness Tests -- IV. Conclusions -- References -- Tables -- 1. Summary Statistics -- 2. Correlation Matrix -- 3. Baseline Regression -- 4. Access to Credit and Informality: Impact of Business Environment -- 5. Informality, Access to Credit, and Business Environment: Interaction Effects -- 6. Access to Credit and Informality: Impact of Institutional Development -- 7. Informality, Access to Credit, and Business Environment: Interaction Effects -- 8. Extended Regressions: Firm Transparency and Performance -- 9. Interaction Regressions: Informality, Firm Transparency, and Firm Performance -- 10. Instrumental Variables Regression -- Appendices -- I. Solving the Model -- II. Countries in the Sample -- III. Variables and Sources.

The paper relies on a firm-level data on transition economies to examine the relationship between informality and bank credit. We find evidence that informality is robustly and significantly associated with lower access to and use of bank credit. We also find that higher tax compliance costs reduce firms' reliance on bank credit, while a stronger quality of the legal environment is associated with higher access to credit even for financially opaque informal firms. An interactive term between a country-wide measure of tax compliance costs and the level of informal activity is negative and significant, suggesting that the negative association between informality and bank credit is stronger in countries with weak tax administration.

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Electronic reproduction. Ann Arbor, Michigan : ProQuest Ebook Central, 2018. Available via World Wide Web. Access may be limited to ProQuest Ebook Central affiliated libraries.

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