Credit Distribution and Exports: Microeconomic Evidence from China

Published on: 2015-11-02

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Credit Distribution and Exports: Microeconomic Evidence from China


HKUST IEMS Working Paper No. 2015-31

LI, Yao Amber; PARK, Albert; ZHAO, Chen Carol



This paper explores how the distribution of credit supply within an industry affects that industry's export intensity (the export-to-sales ratio) and export propensity (the ratio of the number of exporters to the total number of firms). Using a heterogeneous firm trade model, we derive two opposing hypotheses: for industries with relatively low (high) foreign market penetration costs, a more dispersed credit distribution decreases (increases) the industry's export intensity and the number of exporters. The empirical results using Chinese firm-level data and bank loan data support both hypotheses and confirm the significant heterogeneous impacts of credit distribution on exports across industries.


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