Credit Distribution and Exports: Microeconomic Evidence from China

46 Pages Posted: 3 Nov 2015

See all articles by Albert Park

Albert Park

Hong Kong University of Science & Technology (HKUST); Hong Kong University of Science & Technology (HKUST) - HKUST Institute for Emerging Market Studies (IEMS)

Yao Amber Li

Hong Kong University of Science and Technology - School of Business and Management, Department of Economics; HKUST IEMS (Institute for Emerging Market Studies)

Chen Zhao

Hong Kong University of Science & Technology (HKUST)

Date Written: November 2, 2015

Abstract

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.

Keywords: credit constraints, credit supply, financial development, credit distribution, heterogeneous firms, international trade, liquidity

JEL Classification: F14, G20, L60

Suggested Citation

Park, Albert and Li, Yao Amber and Zhao, Chen, Credit Distribution and Exports: Microeconomic Evidence from China (November 2, 2015). HKUST IEMS Working Paper No. 2015-31, Available at SSRN: https://ssrn.com/abstract=2685086 or http://dx.doi.org/10.2139/ssrn.2685086

Albert Park

Hong Kong University of Science & Technology (HKUST) ( email )

Clearwater Bay
Kowloon, 999999
Hong Kong

Hong Kong University of Science & Technology (HKUST) - HKUST Institute for Emerging Market Studies (IEMS) ( email )

IAS 2019, Lo Ka Chung Building,
Lee Shau Kee Campus, HKUST
Clear Water Bay, Kowloon
Hong Kong

HOME PAGE: http://iems.ust.hk

Yao Amber Li (Contact Author)

Hong Kong University of Science and Technology - School of Business and Management, Department of Economics; HKUST IEMS (Institute for Emerging Market Studies) ( email )

Department of Economics, Hong Kong U of Sci&Tech
Clear Water Bay, Kowloon, Hong Kong SAR, China
Kowloon
Hong Kong

HOME PAGE: http://yaoli.people.ust.hk/

Chen Zhao

Hong Kong University of Science & Technology (HKUST) ( email )

Clearwater Bay
Kowloon, 999999
Hong Kong

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