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dc.titleThe Effects of Product Differentiation and Process Innovation on Credit Rationing
dc.contributor.authorGómez, Laura
dc.contributor.authorJoachín, Arturo
dc.contributor.authorTámola, Alejandro
dc.contributor.authorFernández Díez, María Carmen
dc.contributor.orgunitConnectivity, Markets and Finance Division
dc.contributor.orgunitInstitutions for Development Sector
dc.date.available2026-03-06T00:03:00
dc.date.issue2026-03-06T00:03:00
dc.description.abstractInformational credit rationing is a disequilibrium phenomenon in credit markets, in which price mechanisms fail to allocate credit efficiently due to informational frictions. It is commonly argued that innovative firms are particularly susceptible to credit rationing because innovation may exacerbate information asymmetries between firms and lenders. However, this argument often overlooks the improvements in internal information and management required to undertake such activities, which can influence the net change in information available to lenders. These improvements can enhance transparency and reduce agency problems, potentially offsetting the initial informational disadvantages. Using data from the World Bank Enterprise Surveys for medium and large formal firms and proxy indicators such as product differentiation and process improvement, this study estimates the average effect of innovation-related activities on access to credit. The results reveal statistically significant reductions in the probability of experiencing credit rationing, with marginal effects ranging from 11.8 to 19.7 percentage points. These findings are robust across model specifications and suggest that product differentiation, while initially increasing informational frictions, ultimately improves firms credit profiles.
dc.format.extent42
dc.identifier.doihttp://dx.doi.org/10.18235/0013974
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/The-Effects-of-Product-Differentiation-and-Process-Innovation-on-Credit-Rationing.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.subjectSmall Business
dc.subjectForest Resource
dc.subjectCredit Rating Agency
dc.subjectCredit Constraint
dc.subjectInnovation Support
dc.subjectInnovation
dc.subjectFinance
dc.subjectCredit Market
dc.subjectLabor Force
dc.subjectCredit Access
dc.subjectCredit Risk
dc.subjectBank Loan
dc.subjectInnovative Firm
dc.subjectTransparency and Anticorruption
dc.subject.jelcodeD82 - Asymmetric and Private Information • Mechanism Design
dc.subject.jelcodeL25 - Firm Performance: Size, Diversification, and Scope
dc.subject.jelcodeQ31 - Demand and Supply • Prices
dc.subject.keywordscredit rationing;credit markets;innovation;product differentiation;agency problems
dc.typeWorking Papers
idb.identifier.pubnumberIDB-WP-01806
idb.operationRG-E1994
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