01952cas a2200253 a 4500 AALejournalIMF005712 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451872194 1018-5941 BD-DhAAL BD-DhAAL Moreno Badia, Marialuz. The Missing Link Between Financial Constraints and Productivity / Marialuz Moreno Badia, Veerle Slootmaekers. Washington, D.C. : International Monetary Fund, 2009. 1 online resource (39 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The global financial crisis has reopened the debate on the potential spillover effects from the financial sector to the real economy. This paper adds to that debate by providing new evidence on the link between finance and firm-level productivity, focusing on the case of Estonia. We contribute to the literature in two important respects: (i) we look explicitly at the role of financial constraints; and (ii) we develop a methodology that corrects for the misspecification problems of previous studies. Our results indicate that young and highly indebted firms tend to be more financially constrained. Overall, a large number of firms shows some degree of financial constraints, with firms in the primary sector being the most constrained. More importantly, we find that financial constraints do not lower productivity for most sectors. Mode of access: Internet Slootmaekers, Veerle. IMF Working Papers; Working Paper ; No. 2009/072 Full text available on IMF http://elibrary.imf.org/view/journals/001/2009/072/001.2009.issue-072-en.xml IMF e-Library