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Firm Exports and Multinational Activity Under Credit Constraints


  • Kalina Manova

    (Stanford University and NBER)

  • Shang-Jin Wei

    (Columbia University, CEPR, CIER, and NBER)

  • Zhiwei Zhang

    (Nomura Securities)


We provide firm-level evidence that credit constraints restrict international trade and affect the pattern of multinational activity. We show that foreign affiliates and joint ventures in China have better export performance than private domestic firms in financially more vulnerable sectors. These results are stronger for destinations with higher trade costs and not driven by firm size or other sector characteristics. Our findings are consistent with multinational subsidiaries being less liquidity constrained because they can access foreign capital markets or funding from their parent company. They further suggest that FDI can alleviate the impact of domestic financial market imperfections on trade.

Suggested Citation

  • Kalina Manova & Shang-Jin Wei & Zhiwei Zhang, 2015. "Firm Exports and Multinational Activity Under Credit Constraints," The Review of Economics and Statistics, MIT Press, vol. 97(3), pages 574-588, July.
  • Handle: RePEc:tpr:restat:v:97:y:2015:i:2:p:574-588

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    References listed on IDEAS

    1. Héricourt, Jérôme & Poncet, Sandra, 2009. "FDI and credit constraints: Firm-level evidence from China," Economic Systems, Elsevier, vol. 33(1), pages 1-21, March.
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    More about this item


    exports; firm exports; multinational activity; credit; credit constraints; China; foreign markets;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade


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