Variable export price elasticity, product quality, and credit constraints: Theory and evidence from Greek firms

Elias Dinopoulos, Sarantis Kalyvitis and Margarita Katsimi

Journal of International Money and Finance, 2020, vol. 104, issue C

Abstract: We propose a simple model with endogenous quality, additive non-homothetic preferences and credit constraints. A unique data set of Greek manufacturing firms with firm-level exports, credit scores and other financial variables supports the model’s main predictions. Specifically, we establish that less credit-constrained Greek exporters with higher credit scores face export demand curves with lower price elasticity, charge higher export prices, and export higher-quality products.

Keywords: Greece; International trade; Credit constraints; Non-homothetic preferences; Product quality; Demand elasticity (search for similar items in EconPapers)
JEL-codes: F14 G32 L11 L15 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:104:y:2020:i:c:s0261560618304303

DOI: 10.1016/j.jimonfin.2020.102135

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