Exports and Financial Shocks

Mary Amiti and David Weinstein

No 15556, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: A striking feature of many financial crises is the collapse of exports relative to output. In the 2008 financial crisis, real world exports plunged 17 percent while GDP fell 5 percent. This paper examines whether deteriorations in bank health can help explain the large drops in exports relative to output in the recent crisis. Our paper is the first to establish a causal link between the health of banks providing trade finance and growth in a firm's exports relative to its domestic sales. We overcome measurement and endogeneity issues by using a unique data set, covering the Japanese financial crises from 1990 through 2010, which enables us to match exporters with the main bank that provides them with trade finance. Our point estimates are economically and statistically significant, suggesting that the health of financial institutions is an important determinant of firm-level exports during crises.

JEL-codes: E32 E44 F40 G21 (search for similar items in EconPapers)
Date: 2009-12
New Economics Papers: this item is included in nep-ban, nep-int and nep-mac
Note: IFM ITI
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Citations: View citations in EconPapers (116)

Published as Mary Amiti & David E. Weinstein, 2011. "Exports and Financial Shocks," The Quarterly Journal of Economics, Oxford University Press, vol. 126(4), pages 1841-1877.

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Journal Article: Exports and Financial Shocks (2011)
Working Paper: Exports and Financial Shocks (2009)
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