Financial Shocks and Firm Exports: A Natural Experiment Approach with a Massive Earthquake

Daisuke Miyakawa, Kaoru Hosono, Taisuke Uchino, Arito Ono, Hirofumi Uchida and Iichiro Uesugi
Additional contact information
Daisuke Miyakawa: Hitotsubashi University
Taisuke Uchino: Daito Bunka University / RIETI)

No 111, Mo.Fi.R. Working Papers from Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences

Abstract: This paper investigates the effect of financial shocks on firms' exports. To circumvent endogeneity problems, we utilize the natural experiment provided by Japan's Great Hanshin-Awaji earthquake in 1995. Using a unique firm-level dataset, we single out the effect of exogenous financial shocks on firms' exports by focusing on exports of those firms that were not directly damaged by the earthquake but had main bank relationships with damaged banks. Our main findings are twofold. First, as for the extensive margins of exports, the probabilities of starting exports or of expanding export destination areas were smaller for undamaged firms transacted with a damaged main bank than for those transacted with an undamaged main bank. Second, as for the intensive margins of exports, undamaged firms transacted with a damaged main bank had a lower export-to-sales ratio than those transacted with an undamaged main bank. These findings lend support to the existence of the financial constraint on firm exports.

Keywords: Bank Lending; Extensive and Intensive Margins; Firm Exports (search for similar items in EconPapers)
JEL-codes: F14 G21 (search for similar items in EconPapers)
Pages: 49
Date: 2015-07
New Economics Papers: this item is included in nep-cfn
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir111.pdf First version, 2015 (application/pdf)

Related works:
Working Paper: Financial Shocks and Firm Exports: A Natural Experiment Approach with a Massive Earthquake (2016)
Working Paper: Financial Shocks and Firm Exports: A natural experiment approach with a massive earthquake (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:anc:wmofir:111

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