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Do Subsidized Export Loans Increase Exports?

Yusuf Emre Akgunduz (), Suleyman Kal and Huzeyfe Torun ()

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: Turkey's export rediscount credit programme provides credit to exporting firms that is both easy to acquire and is offered at a low interest rate. We follow the performance of firms that first received the credit in 2012 when the amount of credit provided went up dramatically in 2012. We use propensity score mathing to construct a control group of firms with which we compare the credit-receiving firms before and after 2012 in a difference-in-differences framework. These firms have increased their exports substantially in the following years compared to the matched firms with similar propensities to receive the rediscount credit. We find that firms that received the rediscount credit increased their exports by 65% and total sales by 19% compared to matched firms. We find no statistically significant effects on domestic sales and profits. We also find suggestive evidence that the effects fade away after a certain amount of credits.

Keywords: Subsidized credits; Exporting firms; Central banking; Propensity score matching (search for similar items in EconPapers)
JEL-codes: F13 F14 L25 O24 E58 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-bec, nep-int and nep-mac
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