What Predicts the Growth of Small Firms? Evidence from Tanzanian Commercial Loan Data / Mia Ellis, Cynthia Kinnan, Margaret S. McMillan, Sarah Shaukat.

Format:

Book

Author/Creator:

Ellis, Mia.

Contributor:

National Bureau of Economic Research.

Kinnan, Cynthia.

McMillan, Margaret Stokes.

Shaukat, Sarah.

Series:

Working Paper Series (National Bureau of Economic Research) no. w31620.

NBER working paper series no. w31620

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2023.

Summary:

Not all firms have equal capacity to absorb productive credit. Identifying those with higher potential may have large consequences for productivity. We collect detailed survey data on small- and medium-sized Tanzanian firms who borrow from a large commercial bank, which in turn raises funds via international capital markets. Using machine learning methods to identify predictors of loan growth, we document, first, that we achieve high rates of predictive power. Second, "soft" information (entrepreneurs' motivations for entrepreneurship and constraints faced) has predictive power over and above administrative data (sector, age, etc.). Third, there is a different and larger set of predictors for women than men, consistent with greater barriers to efficient capital allocation among female entrepreneurs.

Notes:

Print version record

August 2023.