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Exporters, importers and credit constraints

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  • Muuls, Mirabelle

Abstract

This paper analyzes the interaction between credit constraints and trading behavior, decomposing trade in extensive and intensive margins. I construct a unique dataset containing firm-level trade transaction data, balance sheets and credit scores from an independent credit insurance company for Belgian manufacturing firms between 1999 and 2007. Firms are more likely to be exporting or importing if they enjoy lower credit constraints. Also, firms that have better credit rating export and import more. Importing and exporting behaviors differ in how both the level and growth of the various margins of trade are related to credit constraints in one important dimension. In the case of exports, it is the intensive and extensive margins of exports in terms of both product and destinations that are significantly associated with credit constraints whereas for imports it is the extensive margin in terms of products only.

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  • Muuls, Mirabelle, 2015. "Exporters, importers and credit constraints," LSE Research Online Documents on Economics 61898, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:61898
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    Cited by:

    1. Joachim Wagner, 2016. "A survey of empirical studies using transaction level data on exports and imports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(1), pages 215-225, February.
    2. Wagner, Joachim, 2015. "Credit constraints and the extensive margins of exports: First evidence for German manufacturing," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 9, pages 1-17.
    3. Pradeep Kumar Keshari, 2016. "Spillovers from FDI and Decision to Export by the Domestic Firms: The case of select Indian industries," Working Papers id:11382, eSocialSciences.
    4. Joachim Wagner, 2014. "Credit constraints and exports: a survey of empirical studies using firm-level data," Industrial and Corporate Change, Oxford University Press, vol. 23(6), pages 1477-1492.
    5. Ciani, Andrea & Bartoli, Francesca, 2015. "Export quality upgrading under credit constraints," DICE Discussion Papers 191, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    6. Joachim Wagner, 2015. "Credit constraints and margins of import: first evidence for German manufacturing enterprises," Applied Economics, Taylor & Francis Journals, vol. 47(5), pages 415-430, January.

    More about this item

    Keywords

    credit constraints; international trade; firms' heterogeneity; imports; exports; margins of trade;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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