Exports, Productivity, and Credit Constraints: A Firm-Level Empirical Investigation of China
AbstractRecent Melitz-type (2003) intra-industry heterogonous trade models argue that a firmfs productivity has significant effects on the firmfs exports. This paper examines how a firmfs credit constraints as well as its productivity affect its export decisions. We imbed the firmfs credit constraints into a Melitz-type general-equilibrium model by endogenizing the probability of the success of firm-specific projects. We show that, all else equal, it is easier for firms to enter the export market if (1) the probability of the success of their project is higher and consequently they have easier access to external finance from financial intermediaries; or (2) they have alternative sources, other than from financial intermediaries, to obtain funds. We test these theoretical hypotheses using firm-level data from Chinese manufacturing industries and find strong evidence supporting the predictions of the model.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute of Economic Research, Hitotsubashi University in its series Global COE Hi-Stat Discussion Paper Series with number gd09-098.
Date of creation: Dec 2009
Date of revision:
Credit Constraints; Heterogeneous Firms; Productivity; Trade;
Find related papers by JEL classification:
- F1 - International Economics - - Trade
- F3 - International Economics - - International Finance
- D9 - Microeconomics - - Intertemporal Choice
- G2 - Financial Economics - - Financial Institutions and Services
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-16 (All new papers)
- NEP-EFF-2010-01-16 (Efficiency & Productivity)
- NEP-INT-2010-01-16 (International Trade)
- NEP-PPM-2010-01-16 (Project, Program & Portfolio Management)
- NEP-TRA-2010-01-16 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Amiti, Mary & Konings, Jozef, 2005.
"Trade Liberalization, Intermediate Inputs and Productivity: Evidence from Indonesia,"
CEPR Discussion Papers
5104, C.E.P.R. Discussion Papers.
- Mary Amiti & Jozef Konings, 2007. "Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia," American Economic Review, American Economic Association, vol. 97(5), pages 1611-1638, December.
- Yu, Miaojie, 2010. "Trade, democracy, and the gravity equation," Journal of Development Economics, Elsevier, vol. 91(2), pages 289-300, March.
- Frank Kleibergen & Richard Paap, 2003.
"Generalized Reduced Rank Tests using the Singular Value Decomposition,"
Tinbergen Institute Discussion Papers
03-003/4, Tinbergen Institute.
- Kleibergen, Frank & Paap, Richard, 2006. "Generalized reduced rank tests using the singular value decomposition," Journal of Econometrics, Elsevier, vol. 133(1), pages 97-126, July.
- Kleibergen, F.R. & Paap, R., 2003. "Generalized Reduced Rank Tests using the Singular Value Decomposition," Econometric Institute Research Papers EI 2003-01, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
- Richard Paap & Frank Kleibergen, 2004. "Generalized Reduced Rank Tests using the Singular Value Decomposition," Econometric Society 2004 Australasian Meetings 195, Econometric Society.
- Holz, Carsten A. & Lin, Yi-min, 2001. "The 1997-1998 break in industrial statistics: Facts and appraisal," China Economic Review, Elsevier, vol. 12(4), pages 303-316.
- Hongbin Cai & Qiao Liu, 2009. "Competition and Corporate Tax Avoidance: Evidence from Chinese Industrial Firms," Economic Journal, Royal Economic Society, vol. 119(537), pages 764-795, 04.
- Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2006. "Trading Partners and Trading Volumes," DEGIT Conference Papers c011_022, DEGIT, Dynamics, Economic Growth, and International Trade.
- Harrison, Ann E. & McMillan, Margaret S., 2003. "Does direct foreign investment affect domestic credit constraints?," Journal of International Economics, Elsevier, vol. 61(1), pages 73-100, October.
- Gary Jefferson & Thomas Rawski & Yifan Zhang, 2008. "Productivity growth and convergence across China's industrial economy," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 6(2), pages 121-140.
- Thomas Chaney, 2007.
"Liquidity Constrained Exporters,"
2007 Meeting Papers
979, Society for Economic Dynamics.
- Kalina Manova, 2008. "Credit Constraints, Heterogeneous Firms, and International Trade," NBER Working Papers 14531, National Bureau of Economic Research, Inc.
- repec:hal:cesptp:hal-00633901 is not listed on IDEAS
- Héricourt, Jérôme & Poncet, Sandra, 2009.
"FDI and credit constraints: Firm-level evidence from China,"
Elsevier, vol. 33(1), pages 1-21, March.
- Carsten A. Holz, 2004. "China's Statistical System in Transition: Challenges, Data Problems, and Institutional Innovations," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(3), pages 381-409, 09.
- Yang, Qing Gong & Temple, Paul, 2012.
"Reform and competitive selection in China: An analysis of firm exits,"
Structural Change and Economic Dynamics,
Elsevier, vol. 23(3), pages 286-299.
- Qing Gong Yang & Paul Temple, 2009. "Reform and Competitive Selection in China: An Analysis of Firm Exits," School of Economics Discussion Papers 0409, School of Economics, University of Surrey.
- Miaojie Yu, 2010.
"Processing Trade, Firms Productivity, and Tariff Reductions : Evidence from Chinese Products,"
Trade Working Papers
22873, East Asian Bureau of Economic Research.
- Miaojie Yu, 2010. "Processing Trade, Firm's Productivity, and Tariff Reductions : Evidence from Chinese Products," Macroeconomics Working Papers 22799, East Asian Bureau of Economic Research.
- Yanrui Wu, 2012. "R&D Behaviour in Chinese Firms," Economics Discussion / Working Papers 12-26, The University of Western Australia, Department of Economics.
- Li Junjiang & Hou Lei & Zhang Jiarui, 2011. "Capital endowment, credit constraint and FDI: Analysis based on heterogeneous firms," Frontiers of Economics in China, Springer, vol. 6(1), pages 55-75, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tatsuji Makino).
If references are entirely missing, you can add them using this form.