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Export Growth and Credit Constraints

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Author Info

  • Tibor Besedeš
  • Byung–Cheol Kim
  • Volodymyr Lugovskyy

Abstract

We investigate the effect of credit constraints on the growth of exports at the micro level. We develop a model showing credit constraints play a key role in early stages of exporting, but not in later stages. Our empirical results using product level data on exports to twelve European Union members and the U.S. support the model’s predictions: exports from more credit constrained exporters grow faster. Export growth rates decrease with duration and converge across countries. Larger initial export volume reduces subsequent growth. While an important force in early stages, the effect of credit constraints is not persistent.

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File URL: http://resources.cefig.eu/papers/export_growth_and_credit_constraints.pdf
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File URL: http://www.prism.gatech.edu/~tbesedes3/bkl-exportgrowth.pdf
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Bibliographic Info

Paper provided by Center for Firms in the Global Economy in its series CeFiG Working Papers with number 16.

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Date of creation: 16 Oct 2011
Date of revision: 16 Oct 2011
Handle: RePEc:cfg:cfigwp:16

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References

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  1. Tim Schmidt-Eisenlohr, 2011. "Towards a Theory of Trade Finance," Economics Series Working Papers 583, University of Oxford, Department of Economics.
  2. Kletzer, Kenneth & Bardhan, Pranab, 1986. "Credit Markets and Patterns of International Trade," Department of Economics, Working Paper Series qt1g36f3sd, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  3. Rubén Segura-Cayuela & Josep M. Vilarrubia, 2008. "Uncertainty and entry into export markets," Banco de Espa�a Working Papers 0811, Banco de Espa�a.
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  6. repec:stn:sotoec:1003 is not listed on IDEAS
  7. Davin Chor & Kalina Manova, 2010. "Off the Cliff and Back? Credit Conditions and International Trade during the Global Financial Crisis," NBER Working Papers 16174, National Bureau of Economic Research, Inc.
  8. Hector Calvo & Gregory Corcos & Emanuel Ornelas & Facundo Albornoz, 2010. "Sequential Exporting," 2010 Meeting Papers 1065, Society for Economic Dynamics.
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  10. Araujo, Luis & Mion, Giordano & Ornelas, Emanuel, 2012. "Institutions and Export Dynamics," CEPR Discussion Papers 8809, C.E.P.R. Discussion Papers.
  11. Daniel X. Nguyen, 2010. "Demand Uncertainty: Exporting Delays and Exporting Failures," Discussion Papers 10-17, University of Copenhagen. Department of Economics.
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  14. Costas Arkolakis, 2009. "A Unified Theory of Firm Selection and Growth," CESifo Working Paper Series 2679, CESifo Group Munich.
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  17. Robert C. Feenstra & Zhiyuan Li & Miaojie Yu, 2011. "Exports and Credit Constraints Under Incomplete Information: Theory and Evidence from China," NBER Working Papers 16940, National Bureau of Economic Research, Inc.
  18. 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.
  19. Justin R. Pierce & Peter K. Schott, 2009. "Concording U.S. Harmonized System Categories Over Time," NBER Working Papers 14837, National Bureau of Economic Research, Inc.
  20. Mélise Jaud & Madina Kukenova & Martin Strieborny, 2009. "Financial dependence and intensive margin of trade," Working Papers halshs-00575005, HAL.
  21. Daniel A. Ackerberg, 2003. "Advertising, learning, and consumer choice in experience good markets: an empirical examination," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(3), pages 1007-1040, 08.
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Citations

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Cited by:
  1. Jaud, Melise & Kukenova, Madina & Strieborny, Martin, 2013. "Financial Development and Sustainable Exports: Evidence from Firm-Product Data," Knut Wicksell Working Paper Series 2013/12, Knut Wicksell Centre for Financial Studies, Lund University.
  2. Jaud, Melise & Kukenova, Madina & Strieborny, Martin, 2013. "Finance, Comparative Advantage, and Resource Allocation," Working Papers 2013:13, Lund University, Department of Economics.
  3. Araujo, Luis & Mion, Giordano & Ornelas, Emanuel, 2012. "Institutions and Export Dynamics," CEPR Discussion Papers 8809, C.E.P.R. Discussion Papers.
  4. Goksel, Turkmen, 2012. "Financial constraints and international trade patterns," Economic Modelling, Elsevier, vol. 29(6), pages 2222-2225.
  5. Joachim Wagner, 2014. "Credit constraints and exports: evidence for German manufacturing enterprises," Applied Economics, Taylor & Francis Journals, vol. 46(3), pages 294-302, January.
  6. Nakhoda, Aadil, 2012. "The influence of industry financial composition on export flow: A case study of a developing financial market," MPRA Paper 43792, University Library of Munich, Germany.
  7. Nakhoda, Aadil, 2012. "The influence of financial leverage of firms on their international trading activities," MPRA Paper 35765, University Library of Munich, Germany.

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