Local Financial Development and Firm Performance: Evidence from Morocco.

Working paper

Combining data from the Moroccan census of manufcaturing enterprises with information from a commune survey, we test whether firm expansion is affected by local financial development. Our findings are consistent with this hypothesis: local bank availability is robustly associated with faster growth for small and medium-size firms in sectors with growth opportunities, with a lower likelihood of firm exit and a higher likelihood of investment. The findings also suggests a channel for the effect of the availability of financing in firm growth in our data, namely that access to credit was used to invest in labor saving technology.

Authors: Fafchamps, M; Schündeln, M

• Publisher: CSAE (University of Oxford)
• Series: CSAE Working Paper Series
• Publication date: 2011-01-01
• Language: English