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Massenot, Baptiste and Straub, Stéphane
(2016)
Informal Sector and Economic Development: The Credit Supply Channel.
Economic Inquiry, 54 (2).
pp. 1046-1067.
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Abstract
A standard view holds that removing barriers to entry and improving judicial
enforcement would reduce informality and boost investment and growth. We show,
however, that this conclusion may not hold in countries with a concentrated bank-
ing sector or with low financial openness. When the formal sector becomes larger
in those countries, more entrepreneurs become creditworthy and the higher pres-
sure in the credit market increases the interest rate. This reduces future capital
accumulation. We show some empirical evidence consistent with these predictions.
| Item Type: | Article |
|---|---|
| Language: | English |
| Date: | April 2016 |
| Refereed: | Yes |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 05 Nov 2015 15:11 |
| Last Modified: | 18 Apr 2024 11:54 |
| OAI Identifier: | oai:tse-fr.eu:29846 |
| URI: | https://publications.ut-capitole.fr/id/eprint/18608 |
Available Versions of this Item
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Informal Sector and Economic Growth: The Supply of Credit Channel. (deposited 18 Jan 2012 06:04)
- Informal Sector and Economic Development: The Credit Supply Channel. (deposited 05 Nov 2015 15:11) [Currently Displayed]
