Export survival and foreign financing

Laura D'Amato, Máximo Sangiácomo and Martin Tobal

No 877, BIS Working Papers from Bank for International Settlements

Abstract: Exporting is a finance-intensive activity. But credit markets are frequently underdeveloped and domestic financing tends to be scarce in developing countries, for which a strong export sector is crucial for economic development. Thus, this paper investigates whether foreign financing provides better financing conditions than domestic financing and/or otherwise unavailable external finance, thus increasing export survival rates in a developing country. To that end, it assembles a unique dataset, rarely available for other countries, containing information on foreign credit obtained by Argentine exporters. Based on the empirical models conventionally used in the export survival literature - specifically the probit random effects and the clog-log setups - we provide evidence of a positive link between foreign financing and export survival. This finding is confirmed using an instrumental variable approach.

Keywords: international trade; credit; foreign financing; export survival (search for similar items in EconPapers)
JEL-codes: F10 F13 G20 G28 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2020-08
New Economics Papers: this item is included in nep-fdg and nep-int
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Related works:
Working Paper: Export Survival and Foreign Financing (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:bis:biswps:877

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