U.S. Banking Integration and State-Level Exports
30 Pages Posted: 20 Nov 2014 Last revised: 16 Sep 2017
Date Written: September 14, 2014
We use US interstate banking deregulations to identify the bank finance-trade channel while controlling for state-country bank links. A 1% increase in banking integration between states caused a 0.23% increase in the state-country level foreign exports/domestic shipments ratio between 1992-1996. The observed effect is due to banks with foreign assets, while the US expansion of banks with only domestic assets has no impact on exports/domestic shipments ratio. Our findings support the bank finance channel of international trade.
Keywords: exports, international trade, interstate banking deregulation
JEL Classification: F10, F15, G21, G28
Suggested Citation: Suggested Citation