Export Survival: The Role of Banks and Stock Markets
38 Pages Posted: 12 Nov 2020 Last revised: 20 Jun 2023
Date Written: June 16, 2023
Abstract
Banks and stock markets play distinct roles in helping exporters survive in foreign markets, depending on the specific financial needs of exported products. Stock markets rather than banks help exporters who lack collateralizable tangible assets. Active rather than large stock markets promote exports of products requiring high levels of working capital. And the trade credit acts as a substitute for external financing only from banks and only in the presence of well-established export links. These results on product-level export survival provide new insights into the transmission process from finance to the real economy.
Keywords: banks versus stock markets, transmission from finance to real economy, finance and export survival
JEL Classification: G10, G21, F14
Suggested Citation: Suggested Citation