Exporter and Non-Exporter Exposure to Credit Shocks in an Open Economy Credit Channel Model: Some Evidence from Korea

30 Pages Posted: 20 Dec 2023

See all articles by Spiros Bougheas

Spiros Bougheas

University of Nottingham - School of Economics

Hosung Lim

The Bank of Korea; Bank of Korea - Economic Research Institute

Simona Mateut

Nottingham University Business School

Paul Mizen

University of Nottingham; Bank of England; Centre for Economic Policy Research (CEPR)

Cihan Yalcin

Central Bank of the Republic of Turkey

Date Written: 2014

Abstract

This paper demonstrates that exporting firms suffer less from negative credit shocks in a financial crisis than non-exporting firms because they have access to foreign revenue streams which
continue to have value as collateral to foreign banks. We present a simple model of an open
economy credit channel where exporting firms have access to international credit but non-
exporting firms do not. We then introduce a currency crisis, and observe two channels – a cost
and a competitiveness channel – through which exporters and non-exporters are affected by the
crisis. Our findings are confirmed empirically in a panel of firm-level data for Korea.

Keywords: open economy credit channel, exports, bank lending, Asian crisis

JEL Classification: E44, E51, F34, F41, G21, L25

Suggested Citation

Bougheas, Spiros and Lim, Hosung and Mateut, Simona and Mizen, Paul and Yalcin, Cihan, Exporter and Non-Exporter Exposure to Credit Shocks in an Open Economy Credit Channel Model: Some Evidence from Korea ( 2014). Available at SSRN: https://ssrn.com/abstract=4669291 or http://dx.doi.org/10.2139/ssrn.4669291

Spiros Bougheas

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Hosung Lim

The Bank of Korea ( email )

39, Namdaemun-ro, Jung-gu
Seoul, 04531
Korea, Republic of (South Korea)

Bank of Korea - Economic Research Institute ( email )

110, 3-Ga, Namdaemunno, Jung-Gu
Seoul 100-794
Korea, Republic of (South Korea)

Simona Mateut (Contact Author)

Nottingham University Business School ( email )

Jubilee Campus
Wollaton Road
Nottingham, NG8 1BB
United Kingdom

Paul Mizen

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom
+44 115 951 5479 (Phone)
+44 115 951 4159 (Fax)

Bank of England

Threadneedle Street
London, EC2R 8AH
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Cihan Yalcin

Central Bank of the Republic of Turkey ( email )

Istiklal Cad. 10 Ulus
06100 Ankara, Ankara 06050
Turkey

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