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

We combine a novel measure of export-related financial needs at the product level with a unique database of firm-product export data from five developing countries. Using the tools of survival analysis and controlling for firm and products fixed effects, 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.

[1]  Marian Garcia Martinez,et al.  Food safety performance in European Union accession countries: benchmarking the fresh produce import sector in Hungary , 2006 .

[2]  Martha Denisse Pierola,et al.  Patterns of Export Diversification in Developing Countries: Intensive and Extensive Margins , 2008 .

[3]  Christian Volpe Martincus,et al.  Survival of new exporters in developing countries: Does it matter how they diversify? , 2008 .

[4]  D. Cox.  Regression Models and Life-Tables , 1972 .

[5]  D. Taglioni,et al.  Firms and the Global Crisis: French Exports in the Turmoil , 2009, SSRN Electronic Journal.

[6]  J. Eaton,et al.  The Margins of Entry into Export Markets: Evidence from Colombia Finally We Are Grateful To , 2008 .

[7]  Mihir A. Desai,et al.  Domestic Effects of the Foreign Activities of U.S. Multinationals , 2008 .

[8]  John Romalis.  Factor Proportions and the Structure of Commodity Trade , 2004 .

[9]  T. Beck.  Financial Dependence and International Trade , 2000 .

[10]  T. Beck,et al.  A New Database on Financial Development and Structure , 1999 .

[11]  Volker Nitsch.  Die another day: duration in German import trade , 2007, SSRN Electronic Journal.

[12]  Akiko Suwa-Eisenmann,et al.  1 Do Food Scares Explain Supplier Concentration ? An Analysis of EU Agri-food Imports § July 2009 , 2009 .

[13]  Keith E. Maskus,et al.  The Cost of Compliance with Product Standards for Firms in Developing Countries: An Econometric Study , 2005 .

[14]  James E. Rauch,et al.  Networks Versus Markets in International Trade , 1996 .

[15]  David R. Cox,et al.  Regression models and life tables (with discussion , 1972 .

[16]  L. Iacovone,et al.  Multi-Product Exporters: Diversification and Micro-Level Dynamics , 2008 .

[17]  H. Görg,et al.  Financial Health, Exports, and Firm Survival: A Comparison of British and French Firms , 2009 .

[18]  Lionel Fontagné,et al.  The Impact of Regulations on Agricultural Trade: Evidence from SPS and TBT Agreements , 2007 .

[19]  Martin Strieborny,et al.  Financial Dependence and Intensive Margin of Trade , 2009, SSRN Electronic Journal.

[20]  E. Ornelas,et al.  Sequential Exporting , 2010 .

[21]  James E. Rauch,et al.  Starting Small in an Unfamiliar Environment , 1999 .

[22]  Volodymyr Lugovskyy,et al.  Export Growth and Credit Constraints , 2014 .

[23]  G. Gaulier,et al.  BACI: International Trade Database at the Product-Level (the 1994-2007 Version) , 2009 .

[24]  Marc J. Melitz.  The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity , 2003 .

[25]  Johannes Moenius,et al.  The Good, the Bad and the Ambiguous: Standards and Trade in Agricultural Products , 2006 .

[26]  E. Ornelas,et al.  Sequential exporting: how firms break into foreign markets , 2012 .

[27]  Thomas J. Prusa,et al.  Ins, Outs, and the Duration of Trade , 2004 .

[28]  Jaud Melise,et al.  Finance, Comparative Advantage, and Resource Allocation , 2010 .

[29]  Thomas Chaney.  Liquidity Constrained Exporters , 2013 .

[30]  Mark J. Roberts,et al.  The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs , 1997 .

[31]  Thomas J. Prusa,et al.  Product Differentiation and Duration of US Import Trade , 2005 .

[32]  T. Otsuki,et al.  Saving two in a billion:: quantifying the trade effect of European food safety standards on African exports , 2001 .

[33]  Juan Carlos Hallak,et al.  A Product-Quality View of the Linder Hypothesis , 2006, The Review of Economics and Statistics.

[34]  J. Eaton,et al.  Dissecting Trade: Firms, Industries, and Export Destinations , 2004 .

[35]  D. McGee.  An Introduction to Survival Analysis Using Stata (rev.) , 2005 .

[36]  Mario Cleves,et al.  An Introduction To Survival Analysis Using Stata Third | , 2012 .

[37]  Mark J. Roberts,et al.  An Empirical Model of Sunk Costs and the Decision to Export , 1999 .

[38]  Peter J. Klenow,et al.  Quality heterogeneity across firms and export destinations , 2009 .

[39]  Tibor Besedeš.  Department of Economics Working Paper Series a Search Cost Perspective on Duration of Trade a Search Cost Perspective on Duration of Trade , 2022 .

[40]  Kalina B. Manova,et al.  Credit Constraints, Heterogeneous Firms, and International Trade , 2008 .

[41]  Luigi Zingales,et al.  Financial Dependence and Growth , 1996 .

[42]  H. Svaleryd,et al.  Financial markets, the pattern of industrial specialization and comparative advantage: Evidence from OECD countries , 2005 .

[43]  T. Beck,et al.  A New Database on the Structure and Development of the Financial Sector , 2000 .

[44]  R. Newfarmer,et al.  WATCHING MORE THAN THE DISCOVERY CHANNEL TO DIVERSIFY EXPORTS , 2014 .

[45]  An Anatomy of International Trade: Evidence from French Firms , 2008 .

[46]  Thierry Verdier,et al.  The Organization of Firms in a Global Economy , 2009 .

[47]  P. Brenton,et al.  What Explains the Low Survival Rate of Developing Country Export Flows? , 2009 .

[48]  Nicolas Berman,et al.  Financial factors and the margins of trade: Evidence from cross-country firm-level data , 2010 .

[49]  A. Bernard,et al.  Why Some Firms Export , 2001, Review of Economics and Statistics.