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Exporters and credit constraints. A firm-level approach

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  • Mirabelle Muûls

    ()
    (National Bank of Belgium, Microeconomic Information department
    London School of Economics)

Abstract

By building a theoretical model and taking it to the data with two novel datasets, this paper analyses the interaction between credit constraints and exporting behaviour. Building a heterogeneous firms model of international trade with liquidity-constrained firms yields several predictions on the equilibrium relationships between productivity, credit constraints and exports that are then verified in the data. The main findings of the paper are that firms are more likely to be exporting if they enjoy higher productivity levels and lower credit constraints. Also, credit constraints are important in determining the extensive but not the intensive margin of trade in terms of destinations. This introduces a pecking order of trade. Finally, an exchange rate appreciation will cause existing exporters to reduce their exports, entry of credit-constrained potential exporters and exit of the least productive exporters

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Bibliographic Info

Paper provided by National Bank of Belgium in its series Working Paper Research with number 139.

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Length: 39 pages
Date of creation: Sep 2008
Date of revision:
Handle: RePEc:nbb:reswpp:200809-22

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Related research

Keywords: Credit constraints; heterogeneous firms; margins of export; export destinations; exchange rates and trade;

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Cited by:
  1. Joachim Wagner & John P. Weche Geluebcke, 2013. "Credit Constraints, Foreign Ownership, and Foreign Takeovers in Germany," Working Paper Series in Economics 283, University of Lüneburg, Institute of Economics.
  2. Molina, Danielken & Roa, Monica, 2014. "The Effect of Credit on the Export Performance of Colombian Exporters," MPRA Paper 56137, University Library of Munich, Germany.
  3. Berman, Nicolas & Héricourt, Jérôme, 2010. "Financial factors and the margins of trade: Evidence from cross-country firm-level data," Journal of Development Economics, Elsevier, vol. 93(2), pages 206-217, November.
  4. Cezar, Rafael, 2012. "Newtoning financial development with heterogeneous firms," Economics Papers from University Paris Dauphine 123456789/7596, Paris Dauphine University.
  5. Iacovone, Leonardo & Zavacka, Veronika, 2009. "Banking crises and exports : lessons from the past," Policy Research Working Paper Series 5016, The World Bank.
  6. Joachim Wagner, 2012. "Credit constraints and exports: Evidence for German manufacturing enterprises," Working Paper Series in Economics 251, University of Lüneburg, Institute of Economics.
  7. Wagner, Joachim, 2014. "Credit constraints and margins of import: First evidence for German manufacturing enterprises," Working Paper Series in Economics and Institutions of Innovation 344, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  8. Beck, T.H.L., 2011. "The Role of Finance in Economic Development: Benefits, Risks, and Politics," Discussion Paper 2011-141, Tilburg University, Center for Economic Research.
  9. 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.
  10. Jinjarak, Yothin & Mutuc, Paulo Jose & Wignaraja, Ganeshan, 2014. "Does Finance Really Matter for the Participation of SMEs in International Trade? Evidence from 8,080 East Asian Firms," ADBI Working Papers 470, Asian Development Bank Institute.
  11. repec:spo:wpecon:info:hdl:2441/5l6uh8ogmqildh09h561m4g1g is not listed on IDEAS

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