Financial Shocks and Firm Exports: A Natural Experiment Approach with a Massive Earthquake

Daisuke Miyakawa, Kaoru Hosono, Taisuke Uchino, Arito Ono, Hirofumi Uchida and Iichiro Uesugi

No 50, HIT-REFINED Working Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: This paper investigates the effect of financial shocks on firms' exports. To circumvent endogeneity problems, we utilize the natural experiment provided by Japan's Great Hanshin-Awaji earthquake in 1995. Using a unique firm-level dataset, we single out the effect of exogenous financial shocks on firms' exports by focusing on exports of those firms that were not directly damaged by the earthquake but had main bank relationships with damaged banks. Our main findings are twofold. First, as for the extensive margins of exports, the probabilities of starting exports or of expanding export destination areas were smaller for undamaged firms transacted with a damaged main bank than for those transacted with an undamaged main bank. Second, as for the intensive margins of exports, undamaged firms transacted with a damaged main bank had a lower export-to-sales ratio than those transacted with an undamaged main bank. These findings lend support to the existence of the financial constraint on firm exports.

Keywords: Bank Lending; Firm Exports; Extensive and Intensive Margins (search for similar items in EconPapers)
JEL-codes: F14 G21 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2016-03
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/27779/wp050.pdf

Related works:
Working Paper: Financial Shocks and Firm Exports: A Natural Experiment Approach with a Massive Earthquake (2015)
Working Paper: Financial Shocks and Firm Exports: A natural experiment approach with a massive earthquake (2014)
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