ABSTRACT / We created experimental variation across markets in China in the share of firms having access to a new loan product. Access to finance had a large positive direct effect on the performance of treated firms, but a similar-sized negative indirect effect on the performance of firms with treated competitors, leading to non-detectable gains in producer surplus. Access to finance had a positive direct effect on business quality and consumer satisfaction, and a negative effect on price, which were not offset by indirect effects, implying net gains in consumer surplus. We document other indirect effects and combine effects in a welfare evaluation.
BIO / Adam Szeidl is a Professor of Economics at Central European University. His research interests are economic networks, development economics, and political economy. Adam is a Fellow of the Econometric Society and the European Economic Association, a past editor of the Review of Economic Studies, and a recipient of two European Research Council grants. Before joining CEU in 2011, he was Associate and Assistant Professor of Economics at the University of California, Berkeley. He received his PhD from Harvard University in 2004.