Tesis para optar al grado de Magíster en Economía / Autor no autoriza el acceso a texto completo de su documento / Access to external finance is usually remarked as a salient obstacle for entrepreneurs
and SMEs, although in theory other non-financial constraints could be more binding. We
contribute to this debate exploiting the idea that if external finance is more constrained
for some firms, then they should be using more heavily their internal funds, everything else
constant, with a higher share of reinvested earnings. Using multi-country firm surveys of
developing nations we outline two stylized facts. First, entrepreneurs reinvest a larger share
of their earnings. Firms younger than 5 years old have a share of reinvested profits 25% larger
than that for older firms. Second, although the reinvestment of internal funds is significantly
higher for groups that have restricted access to credit (loans rejected or could not apply), we
do not find statistical significance for groups that self-report finance as their “most binding
constraint”. These findings suggest that one should not equate firm complains to binding
constraints or, alternatively, that indivisibility generate W-shaped cost curves and scale-up
challenges, where investing $1K has low return even if investing $10M could have a high
return.
| Identifer | oai:union.ndltd.org:UCHILE/oai:repositorio.uchile.cl:2250/129906 |
| Date | 09 1900 |
| Creators | Figueroa Sánchez, Camila |
| Contributors | Wagner Brizzi, Rodrigo, Escuela de Postgrado, Economía y Negocios |
| Publisher | Universidad de Chile |
| Source Sets | Universidad de Chile |
| Language | English |
| Detected Language | English |
| Type | Tesis |
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