Export growth and credit constraints

Besedeš, Tibor; Kim, Byung-Cheol; Lugovskyy, Volodymyr

doi:10.1016/j.euroecorev.2014.05.001

Cited by 42 publications

(24 citation statements)

References 43 publications

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“…This is a straightforward way to allow for opportunistic behavior in the importing country (where there is variation in terms of institutional quality in our dataset), but is not essential for our results. 18 Provided that distributors cannot pay in advance more than a myopic distributor expects to receive in a period-as this would permit the producer to easily screen types-the analysis would remain identical. What is crucial is that distributors have the option to behave opportunistically in their relationships with exporters, and that this option is more available in countries with weaker institutions.…”

Section: Paymentsmentioning

confidence: 99%

“…Specifically, assume that a complete contract has n dimensions (contingencies) but only the enforceable 18 It is nevertheless worth noting that, although such "open account" transactions are obviously not the only form of trade financing, they seem to be quite common in practice. We do not know for sure because, as contingencies are written in a contract.…”

Section: Paymentsmentioning

confidence: 99%

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Institutions and export dynamics

Araújo

Mion

Ornelas³

2016

Journal of International Economics

129

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We study how contract enforcement and export experience shape firm export dynamics in an environment with incomplete information. We show that exporters start with higher volumes and sell for longer periods in countries with better contracting institutions and when they have prior foreign experience. However, conditional on survival, firm export growth decreases with the quality of the country's institutions. Controlling for timevarying firm unobservables and other factors, we confirm these and other predictions using a panel of Belgian exporting firms from 1995 to 2008. The results highlight the manifold implications of export experience and contracting institutions for firm dynamics in foreign markets.JEL Classification: F10, F12, L14

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Section: Paymentsmentioning

confidence: 99%

Section: Paymentsmentioning

confidence: 99%

Institutions and export dynamics

Araújo

Mion

Ornelas³

2016

Journal of International Economics

129

View full text Add to dashboard Cite

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“…In a later comparison of small versus large firms in Table 4, we find that larger firms are less sensitive to size than small firms, which is in accordance with Caballero and Hammour (1994) who note smaller firms grow faster. Larger firms are more likely to be exporters due to the requirement for external finance and the ability to absorb exchange rate fluctuations in their markups (see Berman et al, 2012, Besedeš et al 2014.…”

Section: Evidence On the Intensive Marginmentioning

confidence: 99%

“…Since our paper explores the impact of firm balance sheets on growth in sales there is much in common with dynamic models of export growth and financial constraints such as Besedeš et al (2014). They find that exporters to the US and Europe face binding credit constraints after a crisis but these are relaxed after approximately three years as firms achieved growth in exports.…”

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confidence: 99%

The open economy balance sheet channel and the exporting decisions of firms: evidence from the Brazilian crisis of 1999

2015

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We consider the impact of the Brazilian crisis of 1999 on the extensive and intensive margin of exporters versus non-exporters through the open economy balance sheet channel. Using an open-economy balancesheet channel model with firm heterogeneity we explore predictors that firms will engage in global markets. Our results based on a detailed firm-level panel of data for Brazilian 10,573 firms for the period 1996-2007, show that the decision to export and overall growth of sales for exporting firms is driven by size, the debt ratio, the current ratio and operating costs as well as the direct impact of the crisis itself. The findings suggest that the mechanism is driven by the response of the credit market to the creditworthiness of firms as it is by changing terms of trade.

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“…A non-exhaustive list includes: Bellone, Musso, Nesta and Schiavo (2010), Minetti and Zhu (2011), Caggese and Cunat (2013), Manova (2013), Besedes, Kim and Lugovskyy (2014), , Manova, Wei and Zhang (2015), and Hasan and Sheldon (2016). In my model, the huge sunk cost has two channels of influence to the firms.…”

Section: Introductionmentioning

confidence: 99%

Credit Constraint Exports in Countries with Different Degrees of Contract Enforcement

Guo¹,

Luo²

2017

BER

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We theoretically consider firms' export decisions in a heterogeneous firm framework. The paper assumes firms have idiosyncratic productivity levels and are credit-constrained in the export market. Firms in different countries have different degrees of credit constraints. Because of imperfect financial markets, firms might not be able to get the financial support to export even although they are profitable enough from the foreign market. In a country with strong contract enforcement, firms are more likely to export and export to more destinations; while in a country with weak contract enforcement, firms are more likely to be constrained by liquidity and export to fewer destinations. However, for those firms whose productivity is very low or very high, these influences do not exist. Moreover, we consider technology shocks and illustrate that technology shocks will further impede firms' export decisions.

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Export growth and credit constraints

Cited by 42 publications

References 43 publications

Institutions and export dynamics

Institutions and export dynamics

The open economy balance sheet channel and the exporting decisions of firms: evidence from the Brazilian crisis of 1999

Credit Constraint Exports in Countries with Different Degrees of Contract Enforcement

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