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on Corporate Finance |
| By: | Kumar Kar, Ashim (Helsinki Center of Economic Research (HECER)); Bali Swain, Ranjula (Department of Economics) |
| Abstract: | In recent years growing competition in the microfinance industry has been censured for multiple borrowing, default crises, high interest rates and coercive recovery of loans. Using the Boone indicator as a measure for competition, our paper investigates the impact of competition on microfinance institutions’ (MFIs) outreach, financial performance and quality of loan portfolio. We deal with the potential endogeneity issues by employing the instrumental variable approach using the generalized methods of moments (GMM) estimation technique. Analysing the Microfinance Information Exchange data our empirical results show that increased competition in microfinance sector leads to a larger average loans and a decrease in the financial self-sustainability. The data also supports the view that increased competition in the microfinance industry leads to a decline in the loan portfolio quality. |
| Keywords: | microfinance institutions; competition; outreach; financial performance; capitalization; panel data IV estimation |
| JEL: | G21 G32 |
| Date: | 2014–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2014_008&r=cfn |
| By: | William R. Kerr; Ramana Nanda |
| Abstract: | We review the recent literature on the financing of innovation, inclusive of large companies and new startups. This research strand has been very active over the past five years, generating important new findings, questioning some long-held beliefs, and creating its own puzzles. Our review outlines the growing body of work that documents a role for debt financing related to innovation. We highlight the new literature on learning and experimentation across multi-stage innovation projects and how this impacts optimal financing design. We further highlight the strong interaction between financing choices for innovation and changing external conditions, especially reduced experimentation costs. |
| JEL: | G21 G24 L26 M13 O31 O32 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20676&r=cfn |