Help in a Foreign Land: Internationalized Banks and Firms’ Export

Emanuele Brancati

No 15458, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The lack of information is a relevant obstacle to the export activity of small and medium enterprises. This paper analyzes whether banks can support firms’ export by reducing informational asymmetries about foreign markets. We exploit a large sample of Italian firms for which we merge custom data with information on their lender banks. We identify a shock exogenous to firms’ export decisions by relying on preexisting lending relationships and exploiting the acquisition of a firm’s domestic bank by an internationalized banking group. Our results show that, after the acquisition, firms have a significantly higher probability of starting export in countries where the consolidated bank has a foreign branch, which proxies for the amount of information accumulated that can be shared with client firms. Conversely, the effect on the intensive margins of previously-exporting companies is largely insignificant. We interpret these findings as evidence of information spillovers that mainly reduce firms’ fixed entry costs in a foreign market. The analysis also shows that other channels, such as bank credit availability or trade-finance supply, are unlikely to drive our results.

Keywords: firms; export; informational barriers; banks (search for similar items in EconPapers)
JEL-codes: F14 F23 G00 G21 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2022-07
New Economics Papers: this item is included in nep-ban, nep-eur, nep-fdg and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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