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Credit Distribution and Exports: Microeconomic Evidence from China

Author

Listed:
  • Yao Amber Li

    (Department of Economics, Hong Kong University of Science and Technology
    Institute for Emerging Market Studies, Hong Kong University of Science and Technology)

  • Albert Park

    (Department of Economics, Hong Kong University of Science and Technology
    Institute for Emerging Market Studies, Hong Kong University of Science and Technology)

  • Chen Zhao

    (Department of Economics, Hong Kong University of Science and Technology)

Abstract

This paper explores how the distribution of credit supply within an industry affects that industry's export intensity (the export-to-sales ratio) and export propensity (the ratio of the number of exporters to the total number of firms). Using a heterogeneous firm trade model, we derive two opposing hypotheses: for industries with relatively low (high) foreign market penetration costs, a more dispersed credit distribution decreases (increases) the industry's export intensity and the number of exporters. The empirical results using Chinese firm-level data and bank loan data support both hypotheses and confirm the significant heterogeneous impacts of credit distribution on exports across industries.

Suggested Citation

  • Yao Amber Li & Albert Park & Chen Zhao, 2015. "Credit Distribution and Exports: Microeconomic Evidence from China," HKUST IEMS Working Paper Series 2015-31, HKUST Institute for Emerging Market Studies, revised Nov 2015.
    • Handle: RePEc:hku:wpaper:201531
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    File URL: http://iems.ust.hk/assets/publications/working-papers-2015/iemswp2015-31.pdf
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    References listed on IDEAS

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    Cited by:

    1. Li, Yao Amber & Liao, Wei & Zhao, Chen Carol, 2018. "Credit constraints and firm productivity: Microeconomic evidence from China," Research in International Business and Finance, Elsevier, vol. 45(C), pages 134-149.

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    More about this item

    Keywords

    credit constraints; credit supply; financial development; credit distribution; heterogeneous firms; international trade; liquidity;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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