Credit demand in Mozambican manufacturing

TY - JOUR

T1 - Credit demand in Mozambican manufacturing

AU - Byiers, Bruce

AU - Rand, John

AU - Tarp, Finn

AU - Bentzen, Jeanet

N1 - JEL classification: O16, O55

PY - 2010/1

Y1 - 2010/1

N2 - This paper uses two industrial firm surveys to identify the key determinants of credit demand in Mozambican manufacturing. We construct five different measures of being credit constrained and estimate desired debt demand. Besides firm size and ownership structure, we find evidence that general manager education and business association membership are associated with whether a firm is credit constrained or not. Using our preferred measure of credit constraint suggests that around 43 per cent of the firms surveyed are constrained, and these enterprises would almost triple their debt burden if borrowing constraints were relaxed.

AB - This paper uses two industrial firm surveys to identify the key determinants of credit demand in Mozambican manufacturing. We construct five different measures of being credit constrained and estimate desired debt demand. Besides firm size and ownership structure, we find evidence that general manager education and business association membership are associated with whether a firm is credit constrained or not. Using our preferred measure of credit constraint suggests that around 43 per cent of the firms surveyed are constrained, and these enterprises would almost triple their debt burden if borrowing constraints were relaxed.

KW - Faculty of Social Sciences

KW - credit constraints

KW - credit demand

KW - manufacturing

KW - Mozambique

U2 - 10.1002/jid.1558

DO - 10.1002/jid.1558

M3 - Journal article

SN - 0954-1748

VL - 22

SP - 37

EP - 55

JO - Journal of International Development

JF - Journal of International Development

IS - 1

ER -