Economics at your fingertips  


David Kohn (), Fernando Leibovici () and Michal Szkup

International Economic Review, 2016, vol. 57, 453-486

Abstract: This article studies the role of financial frictions as a barrier to international trade. We study new exporter dynamics to identify how these frictions affect export decisions. We introduce a borrowing constraint and working capital requirements into a standard model of international trade, with exports more working capital intensive than domestic sales. Our model can quantitatively account for new exporter dynamics in contrast to a model with sunk export entry costs. We provide additional evidence in support of our mechanism. We find that financial frictions reduce the impact of trade liberalization, suggesting that they constitute an important trade barrier.

Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (23) Track citations by RSS feed

Downloads: (external link)

Related works:
Working Paper: Financial frictions and new exporter dynamics (2014) Downloads
Working Paper: Financial Frictions and New Exporter Dynamics (2014) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0020-6598

Access Statistics for this article

International Economic Review is currently edited by Michael O'Riordan and Dirk Krueger

More articles in International Economic Review from Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297. Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

Page updated 2020-09-11
Handle: RePEc:wly:iecrev:v:57:y:2016:i::p:453-486