Financial Dependence and Intensive Margin of Trade

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Melise Jaud

World Bank

Madina Kukenova

Webster University - Webster University Geneva

Martin Strieborny

University of Glasgow - Adam Smith Business School

Date Written: September 21, 2020

Abstract

We find that financial markets and institutions play distinctive roles in helping exporters survive in foreign markets. The relative importance of banks versus stock markets for export success shifts both across different groups of products and between short-term and long-term export survival. The distinction between large and active stock markets matters as well, especially when it comes to products requiring high levels of working capital. Our results also highlight the importance of deep stock markets for exporters lacking collateralizable assets and the necessity of well-established export links for the successful use of trade credit as a substitute for bank credit.

Keywords: finance and trade, export survival, transmission from finance to real economy, banks versus stock markets

JEL Classification: F14, G10, G21

Suggested Citation

Jaud, Melise and Kukenova, Madina and Strieborny, Martin, Financial Dependence and Intensive Margin of Trade (September 21, 2020). Available at SSRN: https://ssrn.com/abstract=

Melise Jaud

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Madina Kukenova

Webster University - Webster University Geneva ( email )

Route de Collex 15
Bellevue, CH- 1293
Switzerland

Martin Strieborny (Contact Author)

University of Glasgow - Adam Smith Business School ( email )

Glasgow, Scotland
United Kingdom

HOME PAGE: http://www.martinstrieborny.com

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