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Export Growth and Credit Constraints

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  • 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. Beck, T.H.L., 2002. "Financial development and international trade: Is there a Link?," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3125515, Tilburg University.
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  3. Justin R. Pierce & Peter K. Schott, 2012. "Concording U.S. Harmonized System categories over time," Finance and Economics Discussion Series 2012-16, Board of Governors of the Federal Reserve System (U.S.).
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  5. Pol Antràs & C. Fritz Foley, 2011. "Poultry in Motion: A Study of International Trade Finance Practices," NBER Working Papers 17091, National Bureau of Economic Research, Inc.
  6. Greenaway, David & Guariglia, Alessandra & Kneller, Richard, 2007. "Financial factors and exporting decisions," Journal of International Economics, Elsevier, vol. 73(2), pages 377-395, November.
  7. Costas Arkolakis, 2011. "A Unified Theory of Firm Selection and Growth," NBER Working Papers 17553, National Bureau of Economic Research, Inc.
  8. Facundo Albornoz & Hector F. Calvo Pardo & Gregory Corcos & Emanuel Ornelas, 2010. "Sequential Exporting," Discussion Papers 10-08, Department of Economics, University of Birmingham.
  9. Thierry Mayer & Keith Head, 2002. "Illusory Border Effects: Distance Mismeasurement Inflates Estimates of Home Bias in Trade," Working Papers 2002-01, CEPII research center.
  10. Görg, Holger & Henry, Michael & Strobl, Eric, 2007. "Grant Support and Exporting Activity," CEPR Discussion Papers 6054, C.E.P.R. Discussion Papers.
  11. 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.
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  14. Luis Araujo & Giordano Mion & Emanuel Ornelas, 2012. "Institutions and export dynamics," Working Paper Research 220, National Bank of Belgium.
  15. Besedes, Tibor & Prusa, Thomas J., 2011. "The role of extensive and intensive margins and export growth," Journal of Development Economics, Elsevier, vol. 96(2), pages 371-379, November.
  16. Peter Egger & Michaela Kesina, 2013. "Financial Constraints and Exports: Evidence from Chinese Firms," CESifo Economic Studies, CESifo, vol. 59(4), pages 676-706, December.
  17. Beck, T.H.L. & Demirgüç-Kunt, A. & Levine, R., 2000. "A new database on financial development and structure," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3125518, Tilburg University.
  18. Lederman, Daniel & Olarreaga, Marcelo & Payton, Lucy, 2009. "Export promotion agencies revisited," Policy Research Working Paper Series 5125, The World Bank.
  19. 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.
  20. 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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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," Working Papers 2013:14, Lund University, Department of Economics.
  2. Luis Araujo & Giordano Mion & Emanuel Ornelas, 2012. "Institutions and Export Dynamics," CEP Discussion Papers dp1118, Centre for Economic Performance, LSE.
  3. Joachim Wagner, 2012. "Credit constraints and exports: Evidence for German manufacturing enterprises," Working Paper Series in Economics 251, University of Lüneburg, Institute of Economics.
  4. 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.
  5. Melise Jaud & Madina Kukenova & Martin Strieborny, 2014. "Finance, Comparative Advantage, and Resource Allocation," FIW Working Paper series 130, FIW.
  6. Nakhoda, Aadil, 2012. "The influence of financial leverage of firms on their international trading activities," MPRA Paper 35765, University Library of Munich, Germany.
  7. Goksel, Turkmen, 2012. "Financial constraints and international trade patterns," Economic Modelling, Elsevier, vol. 29(6), pages 2222-2225.

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