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Do Subsidized Export Loans Increase Exports?

Author

Listed:
  • Y.Emre Akgunduz
  • S.Hilmi Kal
  • Huzeyfe Torun

Abstract

Turkey's export rediscount credit programme provides credit to exporting firms that is both easy to acquire and is offered at a low interest rate. We follow the performance of firms that first received the credit in 2012 when the amount of credit provided went up dramatically in 2012. We use propensity score mathing to construct a control group of firms with which we compare the credit-receiving firms before and after 2012 in a difference-in-differences framework. These firms have increased their exports substantially in the following years compared to the matched firms with similar propensities to receive the rediscount credit. We find that firms that received the rediscount credit increased their exports by 65% and total sales by 19% compared to matched firms. We find no statistically significant effects on domestic sales and profits. We also find suggestive evidence that the effects fade away after a certain amount of credits.

Suggested Citation

  • Y.Emre Akgunduz & S.Hilmi Kal & Huzeyfe Torun, 2017. "Do Subsidized Export Loans Increase Exports?," Working Papers 1720, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    • Handle: RePEc:tcb:wpaper:1720
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    File URL: https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN/Main+Menu/Publications/Research/Working+Paperss/2017/17-20
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    Cited by:

    1. Stjepan Srhoj & Vanja Vitezic & Joachim Wagner, 2020. "Export boosting policies and firm behaviour: Review of empirical evidence around the world," Working Paper Series in Economics 395, University of Lüneburg, Institute of Economics.
    2. Weiming Lin & Jianling Chen & Jianbang Gan & Yongwu Dai, 2022. "Do Firms That Are Disadvantaged by Unilateral Climate Policy Receive Compensation? Evidence from China’s Energy-Saving Quota Policy," Sustainability, MDPI, vol. 14(22), pages 1-20, November.
    3. Srhoj Stjepan & Vitezić Vanja & Wagner Joachim, 2023. "Export Boosting Policies and Firm Performance: Review of Empirical Evidence Around the World," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 243(1), pages 45-92, February.
    4. Defever, F. & Riaño, A. & Varela, G., 2020. "Evaluating the Impact of Export Finance Support On Firm-level Export Performance: Evidence from Pakistan," Working Papers 20/14, Department of Economics, City University London.
    5. Shazia Kousar & Iqra Khalid & Farhan Ahmed & Jose Pedro Ramos-Requena, 2022. "Asymmetric Effect of Oil Prices on Export Performance: The Role of Export Financing Schemes in Pakistan," International Journal of Energy Economics and Policy, Econjournals, vol. 12(2), pages 188-197, March.

    More about this item

    Keywords

    Subsidized credits; Exporting firms; Central banking; Propensity score matching;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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