Services Trade and Credit Frictions: Evidence from Matched Bank-Firm Data

50 Pages Posted: 8 May 2017

Date Written: May 3, 2017

Abstract

This paper investigates the relationship between bank credit and exports of services by Italian firms. In order to identify the role of credit supply in services exports we use matched data on bank-firm relationships and the shocks affecting banks’ funding during the sovereign debt crisis. The study suggests that credit supply shocks had a significant impact on services exports: a bank credit reduction of 1% led to a fall in exports of about 0.40%. These results hold even after controlling for alternative sources of firms’ external finance, unobserved credit demand heterogeneity and a number of robustness checks.

Keywords: Trade in services, credit frictions, bank-firm relationships

JEL Classification: F10, F14, F36, G21, L80

Suggested Citation

Bripi, Francesco and Loschiavo, David and Revelli, Davide, Services Trade and Credit Frictions: Evidence from Matched Bank-Firm Data (May 3, 2017). Bank of Italy Temi di Discussione (Working Paper) No. 1110, Available at SSRN: https://ssrn.com/abstract=2964811 or http://dx.doi.org/10.2139/ssrn.2964811

Francesco Bripi

Bank of Italy ( email )

P.zza Edison, 3
Milan, Milan 20123
Italy

David Loschiavo (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Davide Revelli

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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