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Citation Information

Type Journal Article - Economics Bulletin
Title Determinants of Credit Rationing in Ethiopia: Firm-Level Evidence
Volume 36
Issue 4
Publication (Day/Month/Year) 2016
Page numbers 2161-2170
URL http://www.accessecon.com/Pubs/EB/2016/Volume36/EB-16-V36-I4-P210.pdf
This study examines the determinants of credit rationing at the firm level in Ethiopia using the World Bank Enterprise
Survey. A seemingly unrelated bivariate probit model is estimated to control for potential selection bias. The result
reveals that in the context of Ethiopia, the age of firm, sales growth, and having checked financial statement by
external auditor reduces the probability of being credit rationed. An increase in sales growth lowers the probability of
being credit rationed by 21%. Firms that checked their account by external auditor reduces the probability of being
rationed by 18.5%. Female ownership, the profitability of the firm, and firm size are insignificant.

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