IDEAS home Printed from https://ideas.repec.org/p/bde/wpaper/1901.html
   My bibliography  Save this paper

Trade and credit: revisiting the evidence

Author

Listed:
  • Eduardo Gutiérrez

    (Banco de España)

  • Enrique Moral-Benito

    (Banco de España)

Abstract

This paper explores the effects of bank lending shocks on export behavior of Spanish firms. For that purpose, we combine Balance of Payments data on exports at the firmproduct-destination level with a matched bank-firm dataset incorporating information on the universe of corporate loans from 2002 to 2013. Armed with this dataset, we identify bankyear specific credit supply shocks following Amiti and Weinstein (2018) and estimate their impact on firms’ exports at the product-destination level. According to our estimates, credit supply shocks have sizable effects on both the intensive margin (amount exported) and the extensive margin of trade (decision to export).

Suggested Citation

  • Eduardo Gutiérrez & Enrique Moral-Benito, 2019. "Trade and credit: revisiting the evidence," Working Papers 1901, Banco de España.
    • Handle: RePEc:bde:wpaper:1901
    as

    Download full text from publisher

    File URL: https://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/19/Fich/dt1901e.pdf
    File Function: First version, January 2019
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Silvia Del Prete & Stefano Federico, 2014. "Trade and finance: is there more than just 'trade finance'? Evidence from matched bank-firm data," Temi di discussione (Economic working papers) 948, Bank of Italy, Economic Research and International Relations Area.
    2. Kirill Borusyak & Peter Hull & Xavier Jaravel, 2022. "Quasi-Experimental Shift-Share Research Designs [Sampling-based vs. Design-based Uncertainty in Regression Analysis]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(1), pages 181-213.
    3. Aeberhardt, Romain & Buono, Ines & Fadinger, Harald, 2014. "Learning, incomplete contracts and export dynamics: Theory and evidence from French firms," European Economic Review, Elsevier, vol. 68(C), pages 219-249.
    4. Pol Antràs & C. Fritz Foley, 2015. "Poultry in Motion: A Study of International Trade Finance Practices," Journal of Political Economy, University of Chicago Press, vol. 123(4), pages 853-901.
    5. Manova, Kalina & Yu, Zhihong, 2016. "How firms export: Processing vs. ordinary trade with financial frictions," Journal of International Economics, Elsevier, vol. 100(C), pages 120-137.
    6. Samuel Bentolila & Marcel Jansen & Gabriel Jiménez, 2018. "When Credit Dries Up: Job Losses in the Great Recession," Journal of the European Economic Association, European Economic Association, vol. 16(3), pages 650-695.
    7. Paul Bergin & Ling Feng & Ching-Yi Lin, 2018. "Financial Frictions and Trade Dynamics," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 66(3), pages 480-526, September.
    8. Daniel Paravisini & Veronica Rappoport & Philipp Schnabl & Daniel Wolfenzon, 2015. "Dissecting the Effect of Credit Supply on Trade: Evidence from Matched Credit-Export Data," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(1), pages 333-359.
    9. Rodrigo Ad~ao & Michal Koles'ar & Eduardo Morales, 2018. "Shift-Share Designs: Theory and Inference," Papers 1806.07928, arXiv.org, revised Aug 2019.
    10. Daniel Paravisini & Veronica Rappoport & Philipp Schnabl, 2015. "Specialization in Bank Lending: Evidence from Exporting Firms," NBER Working Papers 21800, National Bureau of Economic Research, Inc.
    11. Asim Ijaz Khwaja & Atif Mian, 2008. "Tracing the Impact of Bank Liquidity Shocks: Evidence from an Emerging Market," American Economic Review, American Economic Association, vol. 98(4), pages 1413-1442, September.
    12. David Kohn & Fernando Leibovici & Michal Szkup, 2016. "Financial Frictions And New Exporter Dynamics," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(2), pages 453-486, May.
    13. Koenig, Pamina & Mayneris, Florian & Poncet, Sandra, 2010. "Local export spillovers in France," European Economic Review, Elsevier, vol. 54(4), pages 622-641, May.
    14. Berman, Nicolas & Héricourt, Jérôme, 2010. "Financial factors and the margins of trade: Evidence from cross-country firm-level data," Journal of Development Economics, Elsevier, vol. 93(2), pages 206-217, November.
    15. Miguel Almunia & Pol Antràs & David Lopez-Rodriguez & Eduardo Morales, 2021. "Venting Out: Exports during a Domestic Slump," American Economic Review, American Economic Association, vol. 111(11), pages 3611-3662, November.
    16. Mary Amiti & David E. Weinstein, 2018. "How Much Do Idiosyncratic Bank Shocks Affect Investment? Evidence from Matched Bank-Firm Loan Data," Journal of Political Economy, University of Chicago Press, vol. 126(2), pages 525-587.
    17. Niepmann, Friederike & Schmidt-Eisenlohr, Tim, 2017. "No guarantees, no trade: How banks affect export patterns," Journal of International Economics, Elsevier, vol. 108(C), pages 338-350.
    18. Murphy, Kevin M & Topel, Robert H, 2002. "Estimation and Inference in Two-Step Econometric Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 88-97, January.
    19. Richard Baldwin & Paul Krugman, 1989. "Persistent Trade Effects of Large Exchange Rate Shocks," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(4), pages 635-654.
    20. David Kohn & Fernando Leibovici & Michal Szkup, 2016. "Financial Frictions And New Exporter Dynamics," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57, pages 453-486, May.
    21. Minetti, Raoul & Zhu, Susan Chun, 2011. "Credit constraints and firm export: Microeconomic evidence from Italy," Journal of International Economics, Elsevier, vol. 83(2), pages 109-125, March.
    22. Greenaway, David & Guariglia, Alessandra & Kneller, Richard, 2007. "Financial factors and exporting decisions," Journal of International Economics, Elsevier, vol. 73(2), pages 377-395, November.
    23. Morales, Eduardo & Adao, Rodrigo & Kolesár, Michal, 2018. "Shift-Share Designs: Theory and Inference," CEPR Discussion Papers 13118, C.E.P.R. Discussion Papers.
    24. Buono, Ines & Formai, Sara, 2018. "The heterogeneous response of domestic sales and exports to bank credit shocks," Journal of International Economics, Elsevier, vol. 113(C), pages 55-73.
    25. Marco Dueñas & Giorgio Fagiolo, 2013. "Modeling the International-Trade Network: a gravity approach," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 8(1), pages 155-178, April.
    26. Rodrigo Adão & Michal Kolesár & Eduardo Morales, 2018. "Shift-Share Designs: Theory and Inference," NBER Working Papers 24944, National Bureau of Economic Research, Inc.
    27. Samuel Bentolila & Marcel Jansen & Gabriel Jiménez, 2018. "Erratum: When Credit Dries Up: Job Losses in the Great Recession," Journal of the European Economic Association, European Economic Association, vol. 16(2), pages 560-560.
    28. Arellano, Manuel, 2003. "Panel Data Econometrics," OUP Catalogue, Oxford University Press, number 9780199245291, Decembrie.
    29. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    30. Manova, Kalina, 2008. "Credit constraints, equity market liberalizations and international trade," Journal of International Economics, Elsevier, vol. 76(1), pages 33-47, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Joachim Wagner, 2019. "Access to Finance and Exports – Comparable Evidence for Small and Medium Enterprises from Industry and Services in 25 European Countries," Open Economies Review, Springer, vol. 30(4), pages 739-757, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stefano Federico & Fadi Hassan & Veronica Rappoport, 2019. "Trade shocks and credit reallocation," CEP Discussion Papers dp1649, Centre for Economic Performance, LSE.
    2. Stefano Federico & Fadi Hassan & Veronica Rappoport, 2020. "Trade shocks and credit reallocation," Temi di discussione (Economic working papers) 1289, Bank of Italy, Economic Research and International Relations Area.
    3. Muûls, Mirabelle, 2015. "Exporters, importers and credit constraints," Journal of International Economics, Elsevier, vol. 95(2), pages 333-343.
    4. David Kohn & Fernando Leibovici & Michal Szkup, 2021. "Financial Frictions and International Trade," Working Papers 2021-009, Federal Reserve Bank of St. Louis.
    5. Federico J. Diez & Jesse Mora & Alan C. Spearot, 2016. "Firms in international trade," Working Papers 16-25, Federal Reserve Bank of Boston.
    6. C. Fritz Foley & Kalina Manova, 2015. "International Trade, Multinational Activity, and Corporate Finance," Annual Review of Economics, Annual Reviews, vol. 7(1), pages 119-146, August.
    7. Brancati, Emanuele, 2022. "Help in a Foreign Land: Internationalized Banks and Firms’ Export," IZA Discussion Papers 15458, Institute of Labor Economics (IZA).
    8. Francesco Bripi & David Loschiavo & Davide Revelli, 2020. "Services trade and credit frictions: Evidence with matched bank–firm data," The World Economy, Wiley Blackwell, vol. 43(5), pages 1216-1252, May.
    9. Buono, Ines & Formai, Sara, 2018. "The heterogeneous response of domestic sales and exports to bank credit shocks," Journal of International Economics, Elsevier, vol. 113(C), pages 55-73.
    10. Bergin, Paul R. & Feng, Ling & Lin, Ching-Yi, 2021. "Trade and firm financing," Journal of International Economics, Elsevier, vol. 131(C).
    11. Kohn, David & Leibovici, Fernando & Szkup, Michal, 2020. "Financial frictions and export dynamics in large devaluations," Journal of International Economics, Elsevier, vol. 122(C).
    12. Laura D'Amato & Máximo Sangiácomo & Martin Tobal, 2020. "Export survival and foreign financing," BIS Working Papers 877, Bank for International Settlements.
    13. Claessens, Stijn & van Horen, Neeltje, 2021. "Foreign banks and trade," Journal of Financial Intermediation, Elsevier, vol. 45(C).
    14. Nguyen, Quyen T.K. & Almodóvar, Paloma & Wei, Ziyi, 2022. "Intra-firm and arm’s length export propensity and intensity of MNE foreign subsidiaries," Journal of Business Research, Elsevier, vol. 145(C), pages 288-308.
    15. Till Gross & Stephane Verani, 2012. "Financing Constraints, Firm Dynamics, and International Trade," 2012 Meeting Papers 1035, Society for Economic Dynamics.
    16. Daniel Paravisini & Veronica Rappoport & Philipp Schnabl & Daniel Wolfenzon, 2015. "Dissecting the Effect of Credit Supply on Trade: Evidence from Matched Credit-Export Data," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(1), pages 333-359.
    17. INUI Tomohiko & ITO Keiko & MIYAKAWA Daisuke, 2014. "Lender Banks' Provision of Overseas Market Information: Evidence from Japanese small and medium-sized enterprises' export dynamics," Discussion papers 14064, Research Institute of Economy, Trade and Industry (RIETI).
    18. Alfaro, Laura & García-Santana, Manuel & Moral-Benito, Enrique, 2021. "On the direct and indirect real effects of credit supply shocks," Journal of Financial Economics, Elsevier, vol. 139(3), pages 895-921.
    19. Niepmann, Friederike & Schmidt-Eisenlohr, Tim, 2017. "No guarantees, no trade: How banks affect export patterns," Journal of International Economics, Elsevier, vol. 108(C), pages 338-350.
    20. Ivashina, Victoria & Laeven, Luc & Moral-Benito, Enrique, 2022. "Loan types and the bank lending channel," Journal of Monetary Economics, Elsevier, vol. 126(C), pages 171-187.

    More about this item

    Keywords

    credit shocks; exports; firm level data;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F30 - International Economics - - International Finance - - - General
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bde:wpaper:1901. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ángel Rodríguez. Electronic Dissemination of Information Unit. Research Department. Banco de España (email available below). General contact details of provider: https://edirc.repec.org/data/bdegves.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.