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Financial Frictions and Export Dynamics in Large Devaluations

David Kohn, Fernando Leibovici () and Michal Szkup
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David Kohn: Universidad Catolica de Chile

No 949, 2018 Meeting Papers from Society for Economic Dynamics

Abstract: We study the role of financial frictions and balance-sheet effects in account- ing for the dynamics of aggregate exports, output, and investment in large devaluations. We investigate a small open economy with heterogeneous firms and endogenous export decisions, in which firms face financing constraints and debt can be denominated in foreign units. We find that these channels can explain only a small fraction of the dynamics of exports observed in the data since financially-constrained exporters increase exports by reallocating sales across markets. We show analytically the role of this mechanism on exports adjustment and document its importance using plant-level data.

New Economics Papers: this item is included in nep-acc, nep-bec, nep-cfn, nep-dge, nep-int and nep-opm
Date: 2018
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Related works:
Working Paper: Financial Frictions and Export Dynamics in Large Devaluations (2017) Downloads
Working Paper: Financial Frictions and Export Dynamics in Large Devaluations (2017) Downloads
Working Paper: Financial Frictions and Export Dynamics in Large Devaluations (2015) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed018:949

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