Banking crises and exporter dynamics

Di Gong, Shiwei Hu and Zongxin Qian

Applied Economics, 2024, vol. 56, issue 12, 1463-1487

Abstract: This article examines the effects of systemic banking crises on exporter dynamics using exporter data at the country-industry level from the Exporter Dynamics Database (EDD). By considering industries with varying levels of external finance dependence, we are able to capture the heterogeneous impacts of banking crises. Our results demonstrate that banking crises lead to a decrease in the number of successful market entries, a reduction in export market concentration, and a slowdown in both product dynamics and destination dynamics. These findings are robust when accounting for other financial crises, industry characteristics, and potential endogeneity concerns. Overall, our empirical evidence confirms the detrimental impact of banking crises on the extensive margin of exports.

Date: 2024
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DOI: 10.1080/00036846.2023.2257033

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