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Export market exit, financial pressure and the crisis

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  • Görg, Holger
  • Spaliara, Marina-Eliza

Abstract

Using firm-level data for the UK, we investigate the link between firms’ financial health, borrowing ratio and export exit, paying special attention to the recent financial crisis. Our results show that deterioration in the financial position of firms has increased the hazard of export exit during the crisis. We also find that the sensitivity of export exit to changes in firms’ financial condition is higher during the crisis for those firms which face increases in loan spreads associated with the firm-specific interest rate.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9599.

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Date of creation: Aug 2013
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Handle: RePEc:cpr:ceprdp:9599

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Keywords: export market exit; financial crisis; financial pressure;

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  2. Bricongne, Jean-Charles & Fontagné, Lionel & Gaulier, Guillaume & Taglioni, Daria & Vicard, Vincent, 2010. "Firms and the global crisis: French exports in the turmoil," Working Paper Series, European Central Bank 1245, European Central Bank.
  3. Nicolas Berman & Jérôme Héricourt, 2008. "Financial Factors and the Margins of Trade: Evidence from Cross-Country Firm-Level Data," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00321632, HAL.
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  6. Andrew Benito & Garry Young, 2007. "Financial Pressure and Balance Sheet Adjustment by Firms," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(5), pages 581-602, October.
  7. Roberto Alvarez & Ricardo Lopez, 2006. "Entry and Exit in International Markets: Evidence from Chilean Data," Caepr Working Papers, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington 2006-014, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
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  17. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-64, September.
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  19. Sanne Hiller & Philipp J.H. Schroeder & Allan Sorensen, 2013. "Export market exit and firm survival: theory and first evidence," Working Paper Series in Economics 262, University of Lüneburg, Institute of Economics.
  20. Alfonso A. Irarrazabal & Luca David Opromolla, 2008. "A Theory of Entry and Exit into Exports Markets," Working Papers, Banco de Portugal, Economics and Research Department w200820, Banco de Portugal, Economics and Research Department.
  21. Andrew Benito, 2005. "Financial Pressure, Monetary Policy Effects and Inventories: Firm-level Evidence from a Market-based and a Bank-based Financial System," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 72(286), pages 201-224, 05.
  22. Richard I. Harris & Qian Cher Li, 2011. "The Determinants of Firm Exit from Exporting: Evidence for the UK," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 18(3), pages 381-397, November.
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Cited by:
  1. Joachim Wagner, 2013. "Credit constraints and exports: A survey of empirical studies using firm level data," Working Paper Series in Economics 287, University of Lüneburg, Institute of Economics.

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