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Exporters, Importers and Credit Constraints

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  • Mirabelle Muûls
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.

Suggested Citation

  • Mirabelle Muûls, 2012. "Exporters, Importers and Credit Constraints," CEP Discussion Papers dp1169, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp1169
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    File URL: https://cep.lse.ac.uk/pubs/download/dp1169.pdf
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    More about this item

    Keywords

    Credit constraints; international trade; firms’ heterogeneity; imports; exports;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • G01 - Financial Economics - - General - - - Financial Crises
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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