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Does Financing Spur Small Business Productivity?

December 3, 2014 in Economics

Access to adequate financing is an important issue for firms, particularly younger and smaller ones. Given the role these firms play in the process of creative destruction, alleviating financial constraints for start-ups and small businesses is an important concern around the world. New research by Karthik Krishnan, Debarshi Nandy and Manju Puri establishes that greater access to financing leads to higher firm level productivity, particularly for financially constrained firms. Banking deregulations alleviated such constraints, leading to an increase in productivity.

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Source: CATO HEADLINES

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