Working Paper: NBER ID: w16975
Authors: Daniel Paravisini; Veronica Rappoport; Philipp Schnabl; Daniel Wolfenzon
Abstract: We estimate the elasticity of exports to credit using matched customs and firm-level bank credit data from Peru. To account for non-credit determinants of exports, we compare changes in exports of the same product and to the same destination by firms borrowing from banks differentially affected by capital-flow reversals during the 2008 financial crisis. We find that credit shocks affect the intensive margin of exports, but have no significant impact on entry or exit of firms to new product and destination markets. Our results suggest that credit shortages reduce exports through raising the variable cost of production, rather than the cost of financing sunk entry investments.
Keywords: credit supply; trade; exports; financial crisis; Peru
JEL Codes: F10; F30; F40; G15; G21; G32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| negative credit shocks (F65) | volume of exports (F10) |
| credit supply shocks (E51) | variable cost of production (D24) |
| credit supply variations (E51) | existing export flows (F10) |
| credit shocks (G21) | frequency of shipments (L87) |
| credit shocks (G21) | size of shipments (L87) |