Export Survival : The Role of Banks and Stock Markets

Banks and stock markets play distinct roles in helping exporters survive in foreign markets,conditional on the specific financial needs of exported products. Stock markets rather than banks help exporters wholack easily collateralizable tangible assets. Active rather than large stock markets promote exports of productsrequiring high levels of working capital. And the trade credit can act as a substitute for external financing onlyfrom banks and only in the presence of well-established export links. These results on product-level export survivalprovide new insights into the transmission process from finance to the real economy.