Exports and Financial Shocks

50 Pages Posted: 8 Dec 2009 Last revised: 5 Jul 2010

See all articles by Mary Amiti

Mary Amiti

Federal Reserve Bank of New York

David E. Weinstein

Columbia University - Graduate School of Arts and Sciences - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: December 2009

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.

Suggested Citation

Amiti, Mary and Weinstein, David E., Exports and Financial Shocks (December 2009). NBER Working Paper No. w15556. Available at SSRN: https://ssrn.com/abstract=1518749

Mary Amiti (Contact Author)

Federal Reserve Bank of New York ( email )

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New York, NY 10045
United States

David E. Weinstein

Columbia University - Graduate School of Arts and Sciences - Department of Economics ( email )

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New York, NY 10027
United States
212-854-6880 (Phone)
212-854-8059 (Fax)

National Bureau of Economic Research (NBER)

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