The Interactive Impact of Trade Policy Uncertainty and Credit Constraint Heterogeneity on Firms’ Export Margins: Theory and Empirics

Liu Qing (), Zhang Yanchao (), Li Langxing () and Li Shuaihang ()
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Liu Qing: School of Economics, Hefei University of Technology, Hefei230601, China
Zhang Yanchao: School of Economics, Hefei University of Technology, Hefei230601, China
Li Langxing: GSICS, KOBE University, 2-1, Rokkodai, Nada Ward, Kobe City, Hyoko657-8501, Japan
Li Shuaihang: School of Economics, Hefei University of Technology, Hefei230601, China

Journal of Systems Science and Information, 2021, vol. 9, issue 6, 575-607

Abstract: This paper develops a simple trade model of heterogeneous firms, which incorporates the dual heterogeneity of credit constraints at the firm and industry levels and reveals the effects of the interaction mechanisms of trade policy uncertainty and credit constraint heterogeneity on exporters’ behaviour. The model confirms that the higher the level of industrial credit constraints, the greater the interaction of trade policy uncertainty and credit constraint heterogeneity, but firms with lower levels of credit constraints within a specific industry are more affected by this interaction. Then, based on the highly dis-aggregated trade data of China’s firms from 2000 to 2013, this paper provides empirical evidence for the main predictions and mechanisms of the theoretical model.

Keywords: trade policy uncertainty; heterogeneity of credit constraints; export margins (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:jossai:v:9:y:2021:i:6:p:575-607:n:1

DOI: 10.21078/JSSI-2021-575-33

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