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Financial Development, Exporting and Firm Heterogeneity in Chile

  • Roberto Alvarez
  • Ricardo López

Using plant-level data from Chile’s manufacturing sector for the period 1990-2000, this paper examines the effect of financial development on the probability of exporting at the plant level, with a special focus on the heterogeneous responses of plants with different characteristics. The main results are that an improvement in financial development increases the probability of exporting of more productive plants and those with foreign ownership operating in manufacturing sectors that are more dependent on external finance. Our estimates also indicate that financial development does not appear to improve the probability of exporting for relatively smaller and younger plants. This result suggests that, at least for the case of exporting in Chile, smaller and younger plants are not necessarily more likely to benefit from improvements in access to credit than larger and older ones.

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Paper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 666.

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Date of creation: Mar 2012
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Handle: RePEc:chb:bcchwp:666
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  24. repec:uwo:epuwoc:20057 is not listed on IDEAS
  25. Levine, Ross, 1996. "Financial development and economic growth : views and agenda," Policy Research Working Paper Series 1678, The World Bank.
  26. Jaud, Melise & Kukenova, Madina, 2011. "Financial development and survival of African agri-food exports," Policy Research Working Paper Series 5649, The World Bank.
  27. Kasahara, Hiroyuki & Rodrigue, Joel, 2008. "Does the use of imported intermediates increase productivity? Plant-level evidence," Journal of Development Economics, Elsevier, vol. 87(1), pages 106-118, August.
  28. King, Robert G. & Levine, Ross, 1993. "Finance and growth : Schumpeter might be right," Policy Research Working Paper Series 1083, The World Bank.
  29. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
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