DF Lunch Seminar with Prof. Benjamin Roth, Harvard Business School

Info

The Lunch Seminar series hosted by the Department of Finance features distinguished and emerging researchers from around the globe in Luxembourg.

Abstract:

This seminar explores whether a pre-disaster credit injection negatively impacts small business performance. By analyzing a microfinance institution's unexpected credit freeze coinciding with the 2020 Covid lockdown in Chile, a comparison was made between small business owners who applied for loans just before the freeze and those who applied afterward. The former group received approximately USD 600 more in credit immediately before the lockdown. Three months post-lockdown, businesses that received the loans were 35 percentage points (61%) less likely to remain operational, and their monthly profits were, on average, USD 167 (58%) lower. Even three years later, these businesses showed an 11 percentage point (25%) lower likelihood of borrowing from the microfinance institution. Survey responses indicated that loan recipients would have refrained from borrowing had they anticipated the shutdown, and they would have allocated the funds differently (for instance, on non-perishable items if they had known). The findings prompt considerations for policy adjustments.

More about Prof. Roth:
Benjamin N. Roth (Harvard Business School)

The seminar will take place in person.

Cold lunches will be offered to registered participants only.

This seminar is Supported by the Luxembourg National Research Fund (RESCOM/2023/LE/17984041)