Financial Development and Sustainable Exports: Evidence from Firm‐product Data

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We combine a novel measure of export-related financial needs at the product level with a unique database of firm-product export data (including names of the exporting firms) from five developing countries. Using the tools of survival analysis and taking into account firms' and products' heterogeneity, we then examine the impact of financial development on the long-term trade. Finance matters for sustainable export performance, as goods with higher export-related financial needs disproportionately benefit from better financial development. Our results complement existing literature on finance and trade, which has relied on production-based measures of financial dependence at the industry or firm level. Terms of use: Documents in EconStor mayJEL-Code: F100, G100, O160.

Explaining Export Duration in Kenya

“…Financial development is the supply of domestic credit from the financial sector to various sectors of the economy except to the central government. It is expected to increase survival rates of exports (Besedeš et al, ; Jaud et al , ).…”

How Does Financial Development Impact Trade Openness? Evidence from Export Performance of Pakistan

“…It is suggested that countries should consider following the export destination hierarchy which is actually trade cost and the size of market etc. Jaud, Kukenova, and Strieborny (2015) revealed financial development effects on longterm trade and also probed the requirements pertaining to finance at the product level by taking data of firm product export from five countries in the category of development phase. Cross sectional data is employed by using share of exporting country as exogenous variable and limited control as the endogenous variable.…”

Finance, Comparative Advantage, and Resource Allocation

“…For example, Berger et al (2013) show that successful CIA interventions in foreign countries lead to dramatic export increases from the US to these countries but have no impact on the exports from the affected countries to the US destination market. 29 Besedes and Prusa (2006a) were the first to apply the analytical tools of survival analysis in the context of international trade, triggering an extensive follow-up research on trade survival (see, e.g., Besedes and Prusa, 2006b;Carballo and Volpe Martincus, 2008;Jaud, Kukenova, and Strieborny, 2009;Nitsch, 2009;Brenton, Saborowski, and von Uexkull, 2010;Obashi, 2010;Besedes and Prusa, 2011;Fugazza and Molina, 2011;Brenton, Cadot, and Pierola, 2012;Carrere, and Strauss-Kahn, 2012;Chen, 2012;Besedes, 2013;Cadot et al, 2013;Jaud, Kukenova, and Strieborny, 2015). 30 In one of the robustness checks in the Online Appendix, we also run a linear probability model of exiting the US destination market as an alternative to the formal survival framework.…”

“…This literature has provided empirical support for the importance of wellfunctioning financial environment for countries' and firms' successful export performance in two ways. It has showed that domestic financial development improves export performance, particularly for industries dependent on external finance and firms facing credit constraints (e.g., Beck, 2002Beck, , 2003Ju and Wei, 2005;Greenaway, Guariglia, and Kneller, 2007;Manova, 2008;Jaud, Kukenova, and Strieborny, 2009;Berman and Héricourt, 2010;Becker, Chen, and Greenberg, 2013;Manova, 2013;Besedes, Kim, and Lugovskyy, 2014;Jaud, Kukenova, and Strieborny, 2015). A related strand of papers has explored the negative impact of disturbances in the financial system on trade performance, especially during the recent global financial crisis (e.g., Bricongne et al, 2010;Amiti and Weinstein, 2011;Levchenko, Lewis, and Tesar, 2011;Chor and Manova, 2012;Paravisini et al, 2015).…”