Financing Constraints, Firm Dynamics, and International Trade

Till Gross () and Stephane Verani

No 2012-68, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: There is growing empirical support for the conjecture that access to credit is an important determinant of firms' export decisions. We study a multi-country general equilibrium economy in which entrepreneurs and lenders engage in long-term credit relationships. Financial constraints arise in consequence of financials contracts that are optimal given information asymmetry. Consistent with empirical regularities, as firm age and size increase, the model implies decreasing mean and variance of fi rm growth and increasing fi rm survival. Exporters are larger, their survival in international markets increases with the time spent exporting, and the sales of older exporters are larger and more stable.

Keywords: private information; long-term financial contracts; exporter dynamics; international trade; financial intermediation (search for similar items in EconPapers)
JEL-codes: D82 F10 L14 (search for similar items in EconPapers)
Pages: 45
Date: 2012-08
New Economics Papers: this item is included in nep-dge and nep-int
Note: A revised version of this paper is posted as FEDS Working Paper 2013-02.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Financing Constraints, Firm Dynamics, and International Trade (2013)
Working Paper: Financing Constraints, Firm Dynamics, and International Trade (2013)
Working Paper: Financing Constraints, Firm Dynamics, and International Trade (2012)
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