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Abstract
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 sector level. The sample firms are compared with respect to rates of different performance indicators including: technical efficiency (a Data Envelopment Analysis – DEA – approach is applied to estimate technical efficiency level for individual sectors), production workers trained, expenditures of R&D, and export activity. In order to avoid the selectivity problem, propensity score matching methodologies are adopted. Results suggest that a certain level of overdraft facility given to a firm would be needed to stimulate investment in R&D, which will eventually result in growth in productivity.
Additional information
Notes on contributors
Leopoldo Laborda Castillo
Leopoldo LABORDA CASTILLO. He works as STC at the World Bank and as Research Associate at the Institute of Latin American Studies in the University of Alcala (Spain). He received his PhD from University of Alcala. His research focuses on productivity and efficiency analysis in public and private sectors.
Daniel Sotelsek Salem
Daniel SOTELSEK SALEM. He holds a PhD in Economics from the University of Alcalá. Since 1999, he is an Associate Professor at the Department of Economics, University of Alcalá-Spain. His research focuses on financial economics, environmental economics and economic development.