 The trade effects of counter-cyclical fiscal policiesHo-Chuan Huang and Pei-Chien Lin International Review of Economics & Finance, 2016, vol. 45, issue C, 82-95 Abstract: This article assesses the causal effect of a counter-cyclical fiscal policy on industrial exports. By utilizing Rajan and Zingales's (1998) difference-in-difference methodology on a large panel of cross-country, cross-industry data over the period 1989–2004, we show that industries with higher dependence on external finance tend to export more in countries that implement fiscal policies that are more counter-cyclical. More specifically, the results of the OLS (IV) estimation indicate that there exists a difference in the gains in terms of the export share lying in a range from 9.8% to 13.5% (25.7% to 39.3%) between the industry at the 75th percentile and the 25th percentile of external finance in a country with a degree of fiscal counter-cyclicality at the 75th percentile compared with a country at the 25th percentile. Moreover, the key finding survives a variety of robustness checks. Keywords: Fiscal policy; Counter-cyclicality; External finance; Industrial exports (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:45:y:2016:i:c:p:82-95 DOI: 10.1016/j.iref.2016.05.002 Access Statistics for this article International Review of Economics & Finance is currently edited by H. Beladi and C. Chen More articles in International Review of Economics & Finance from Elsevier |
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