Financing Constraints, Firm Dynamics, and International Trade

Till Gross () and Stephane Verani

No 2013-02, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: There is growing empirical support for the conjecture that access to credit is an important determinant of firms' export decisions. We study a multi-country general equilibrium economy in which entrepreneurs and lenders engage in long-term credit relationships. Financial constraints arise as a consequence of financial contracts that are optimal under private information. Consistent with empirical regularities, the model implies that older and larger firms have lower average and more stable growth rates, and are more likely to survive. Exporters are larger, their survival in international markets increases with the time spent exporting, and the sales of older exporters are larger and more stable.

Keywords: private information; long-term financial contracts; exporter dynamics; international trade; financial intermediation (search for similar items in EconPapers)
JEL-codes: D82 F10 L14 (search for similar items in EconPapers)
Pages: 45
Date: 2013
New Economics Papers: this item is included in nep-cta, nep-dge, nep-int and nep-opm
Note: This paper is a revised version of FEDS Working Paper 2012-68.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Financing Constraints, Firm Dynamics, and International Trade (2013)
Working Paper: Financing Constraints, Firm Dynamics, and International Trade (2012)
Working Paper: Financing Constraints, Firm Dynamics, and International Trade (2012)
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