Trade and Finance: Is There More than Just 'Trade Finance'? Evidence from Matched Bank-Firm Data
65 Pages Posted: 2 Apr 2014
Date Written: January 24, 2014
Using unique matched bank-firm data on export, import and ordinary loans for a large sample of Italian manufacturing exporters for the years 2007-2010, this paper investigates the role of trade finance in a credit shock. We find that the credit shock faced by exporters in the aftermath of the Lehman Brothers' collapse was due more to a diminished availability of ordinary loans than to specific constraints in trade finance. We also show that the credit shock had a negative impact on exports: firms, especially financially distressed ones, that borrowed from banks which were more exposed to a negative funding shock exported less compared with firms that borrowed from less exposed intermediaries.
Keywords: trade finance, trade collapse, credit shocks, export loans
JEL Classification: G21, F14, F30, G30, L20
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