U.S. Banking Integration and State-Level Exports

Tomasz Michalski and Evren Ors ()

No 1066, HEC Research Papers Series from HEC Paris

Abstract: Using inter-state banking deregulation in the U.S. as an exogenous experiment, the authors find that a 1% increase in banking integration between U.S. states caused a 0.164-0.184% increase in the foreign exports/domestic shipments ratio for U.S. state level exports in the years 1992-1996. They can ascribe these effects to the integration by banks with foreign assets: a 1% increase in banking integration through such banks caused the exports/domestic shipments ratio to increase by 0.22-0.41% while the expansion of banks with purely domestic assets appears to have no impact. Given the empirical specification, this increase in openness can be attributed to an increase in capital to cover variable and fixed export costs relative to domestic shipping costs and a higher provision of trade finance services. Serving new destinations (the extensive margin defined at the state-country level) accounts for 22% to 28% of the banking integration effect that the authors observe.

Keywords: exports; financial depth; inter-state banking deregulation (search for similar items in EconPapers)
JEL-codes: F10 F15 G21 G28 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2014-11-15
New Economics Papers: this item is included in nep-ban
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: U.S. Banking Integration and State-Level Exports (2014)
Working Paper: U.S. Banking Integration and State-Level Exports (2012)
Working Paper: U.S. Banking Integration and State-Level Exports (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1066

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