Access to Finance and Job Growth : Firm-Level Evidence across Developing Countries

This paper investigates the effect of access to finance on job growth in 50,000 firms across 70 eveloping countries. Using the introduction of credit bureaus as an exogenous shock to the supply of credit, the paper finds that increased access to finance results in higher employment growth, especially among micro, small, and medium enterprises. The results are robust to using firm fixed effects, industry measures of external finance ependence, and propensity score matching in a complementary panel data set of more than four million firms in 29 eveloping countries. The findings have implications for policy interventions targeted to produce job growth in micro, small, and medium enterprises