Overdraft Facility Policy and Firm Performance : An Empirical Analysis in Eastern European Union Industrial Firms | Land Portal

Resource information

Date of publication: 
June 2012
Resource Language: 
ISBN / Resource ID: 
oai:openknowledge.worldbank.org:10986/9319
Copyright details: 
CC BY 3.0 Unported

This article evaluates the effect of the
overdraft facility (or line of credit) policy by comparing a
large sample of overdraft facilitated firms and matched
non-overdraft facilitated firms from Eastern Europe at the
sector level. The sample firms are compared with respect to
rates of different performance indicators including:
technical efficiency (a Data Envelopment Analysis approach
is applied to estimate the technical efficiency level for
individual sectors), production workers trained,
expenditures on research and development, and export
activity. In order to avoid the selectivity problem,
propensity score matching methodologies are adopted. The
results suggest that a certain level of overdraft facility
provided to firms would be needed to stimulate investment in
research and development, which will eventually result in
increased growth in productivity.

Authors and Publishers

Author(s), editor(s), contributor(s): 

Castillo, Leopoldo Laborda
Guasch, Jose Luis

Publisher(s): 

The World Bank is a vital source of financial and technical assistance to developing countries around the world. We are not a bank in the ordinary sense but a unique partnership to reduce poverty and support development.

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The World Bank is a vital source of financial and technical assistance to developing countries around the world. We are not a bank in the ordinary sense but a unique partnership to reduce poverty and support development.

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