2024/07/30 by Jing Cai, Cai Jing, Adam Szeidl +1
Economics, Econometrics and Finance · Business, Management and Accounting · Social Sciences · #Microfinance and Financial Inclusion #Financial Literacy, Pension, Retirement Analysis #Gender, Labor, and Family Dynamics
paper · doi:10.1257/aer.20220711
We created experimental variation across markets in China in the share of firms having access to a new loan product. Access to finance had a large positive direct effect on the performance of treated firms but a similar-sized negative indirect effect on that of firms with treated competitors, leading to nondetectable gains in producer surplus. Access to finance had a positive direct effect on business quality and consumer satisfaction and a negative effect on price, which were not offset by indirect effects, implying net gains in consumer surplus. We document other indirect effects and combine effects in a welfare evaluation. (JEL D22, G21, G32, L81, O16, P31, P34)