A comment on Xu (2022). Reshaping Global Trade: The Immediate and Long-Term Effects of Bank Failures

Guillaume Bérard, Dimitria Freitas and Priyam Verma

No 85, I4R Discussion Paper Series from The Institute for Replication (I4R)

Abstract: Xu (2022) estimates the causal impact of bank failures on the level of trades with a staggered difference-in-differences design and an IV strategy with Bartik instrument, using the 1866 banking crisis as a quasi-natural experiment. Findings, based on historical data on the trades and loans between London banks and banks around the world, show that countries exposed to bank failures in London immediately exported significantly less and did not recover their lost growth relative to unexposed places. Moreover, the effect lasted for decades. First, we reproduce the paper's main findings by running the original code and uncover three issues, one of which that slightly affects the main estimates reported in the study. Second, we test the robustness of the results to (1) removing weights from the regressions, (2) using a spatial HAC correction for the standard errors, and (3) implementing a method for possibly heterogeneous treatment effects with a staggered difference-indifferences design. Overall, we conclude that the main findings are valid and robust.

Keywords: Replication; Robustness; Trade; Bank failures; Historical data; Difference-in-differences (search for similar items in EconPapers)
JEL-codes: F14 G01 G21 N20 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-ban, nep-fdg, nep-his and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/279958/1/I4R-DP085.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:i4rdps:85

Access Statistics for this paper

More papers in I4R Discussion Paper Series from The Institute for Replication (I4R)
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().