Financial Vulnerability and Export Diversification in Developing Countries

Marie-Ange Véganzonès, Youssouf Kiendrebeogo and Melise Jaud ()

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Abstract: This paper examines the implication of financial shocks on firms' export dynamics in developing economies. To address this question, we use the Exporter Dynamics Dataset, which contains new data on the micro-structure of exports for 34 developing countries between 1997 and 2011, and investigate how exporter behavior is affected by financial crises. We find that financial crises in both the origin and destination countries have a large negative effect on firm, product, and destination dynamics, particularly in industries dependent on external finance. Financial crises make the costs of exporting more difficult to meet and in turn reduce firms' ability to start exporting, introduce new products, and sell to new destinations. We also find that the impact of financial crises is less pronounced in exporting countries with relatively more open capital accounts, suggesting that portfolio inflows may be a good substitute for under-developed domestic financial markets.

Keywords: Financial Contraints; Firms’ Export Diversification; Manufacturing; Developing Countries (search for similar items in EconPapers)
Date: 2015-05-21
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Published in 9th Annual Conference of the Spatial Econometrics Association (SEA), May 2015, Miami, United States

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Related works:
Working Paper: Financial Vulnerability and Exports Diversification in Developing Countries (2016)
Working Paper: Financial Vulnerability and Export Diversification in Developing Countries (2015)
Working Paper: Financial Vulnerability and Exports Diversification in Developing Countries (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03058433

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