Title: PRODUCTIVITY AND CREDIT CONSTRAINTS: A FIRM-LEVEL PROPENSITY SCORE EVIDENCE
Authors: CIAIAN PAVELFALKOWSKI JanKANCS D'ARTIS
Citation: ACTA OECONOMICA vol. 62 no. 4 p. 459–487
Publisher: AKADEMIAI KIADO RT
Publication Year: 2012
JRC N°: JRC76170
ISSN: 0001-6373
URI: http://publications.jrc.ec.europa.eu/repository/handle/JRC76170
DOI: 10.1556/AOecon.62.2012.4.3
Type: Articles in Journals
Abstract: Drawing on a unique farm level panel data set with 37,409 observations and employing a matching estimator, this paper analyses how farm access to credit affects farm input allocation and farm efficiency in the CEE transition countries. We find that farms are asymmetrically credit constrained with respect to inputs. Farm use of variable inputs and capital investment increases up to 2.3% and 29%, respectively, per 1000 EUR of additional credit. Our estimates suggest also that farm access to credit increases the total factor productivity up to 1.9% per 1000 EUR of additional credit, indicating that an improved access to credit results in adjusting the relative input intensities on farms. This finding is further supported by a negative effect of better access to credit on labour, suggesting that these two are substitutes. Interestingly, farms are found not to be credit constrained with respect to land.
JRC Institute:Institute for Prospective Technological Studies

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