Exporters, Importers and Credit Constraints

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper analyses the interaction between credit constraints and trading behaviour. I construct a unique dataset containing firm-level trade transactions data, balance sheets and credit scores from an independent credit insurance company for Belgian manufacturing firms between 1999 and 2007. Firms are more likely to be exporting or importing if they enjoy lower credit constraints. Also, firms that have better credit rating export and import more, and more products to and from more countries. Whilst importing and exporting behavior are very similar in a static view, an analysis of how various margins of trade are related to credit constraints show a significant difference between the two. In the case of exports, it is the extensive margin of exports in terms of destinations that is significantly associated with credit constraints whereas for imports it is the extensive margin in terms of products.

Keywords: Credit constraints; international trade; firms’ heterogeneity; imports; exports (search for similar items in EconPapers)
JEL-codes: F10 F14 G01 G20 (search for similar items in EconPapers)
Date: 2012-10
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Exporters, importers and credit constraints (2015)
Working Paper: Exporters, importers and credit constraints (2015)
Working Paper: Exporters, importers and credit constraints (2012)
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