Who Gains from Better Access to Credit? Credit Reform and Reallocation of Resources

Arbeitspapier

Brazil's 2005 bankruptcy law reform strengthened creditor protection, resulting in a substantial acceleration of credit expansion and business investment growth. In this paper, we go beyond average effects and examine to what extent the pro-creditor reform affected the allocation of resources across firms. We find evidence that the reform was particularly effective in alleviating credit constraints for high productivity firms. After the reform, better access to credit allowed these firms to thrive on the expense of others. Our results suggest that better access to credit can improve the allocation of resources across firms, thus raising aggregate productivity.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 6677

Classification and Topics

• Classification: Wirtschaft ; Bankruptcy; Liquidation ; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
• Subject: TFP ; credit constraint ; credit reform ; heterogeneous firms

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Arnold, Jens Matthias ; Flach, Lisandra
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/171141
• Last update: 10.03.2025, 11:44 AM CET