When:
Thursday, October 31, 2024
12:15 PM - 1:15 PM CT
Audience: Faculty/Staff - Post Docs/Docs - Graduate Students
Contact:
Maggie Hendrix
(847) 467-7263
Group: Department of Economics: Development Economics Lunch Seminar
Category: Academic
Speaker: Nathalie Basto
Title: "Real effects of firms credit information"
Abstract: This paper examines the "Clean Slate" policy's impact on firms in Colombia, which aimed to reduce credit information retention times for previously delinquent firms, thus enhancing credit access and addressing the "no-credit history trap" often facing SMEs. Using a regression discontinuity design around the policy's revenue cutoff, this study reveals mixed effects: while delinquent firms gain short-term credit access, potentially easing liquidity constraints, non-delinquent firms face adverse credit conditions due to pooled risk. Findings indicate that limiting negative credit histories can facilitate credit access but risks creating equilibrium effects that inadvertently tighten credit conditions for traditionally reliable firms. These insights contribute to understanding policy trade-offs in financial inclusion and credit market dynamics.