The Competence Centre for International Economics Research (FIW) kindly invites to participate in the Seminar in International Economics on the topic
Exporting and Investment under Credit Constraints
Walter Steingress
Bank of Canada
Thursday, 20th of January 2022, 3:00 p.m. (CET)
Registration link:
https://us06web.zoom.us/webinar/register/WN_wDKzA8MESkK1dir8fMZmaQ
The dial-in link will be ssent immediately after registration.
Abstract:
We examine the relationship between firm performance and export entry credit constraints. The existing research assumes that variation in firm financial conditions identifies credit constraints. A critical assumption is that financial conditions do not affect real outcomes (performance, exporting, or investment). To relax this assumption, we focus on the direct effect of firm fundamentals and financial conditions on firm performance. This approach distinguishes between firms who choose not to export because it is unprofitable from firms that do not export because of binding credit constraints. Our empirical specification allows firm characteristics to enter both the selection into exporting and return from exporting regressions. The leverage response heterogeneity identifies the presence of credit constraints. Using administrative Canadian firm-level data, our findings show that new exporters (a) increase their productivity, (b) raise their leverage ratio and (c) increase investment. We estimate that about 15 percent of Canadian manufacturers do not engage in export-induced productivity growth because of credit constraints.
The seminar series is organised by the Vienna Institute for International Economic Studies (wiiw) in co-operation with FIW, the Centre of Competence in International Economics. The seminar provides a forum for presentation and discussion of recent academic research in the field of international economics.
Link to the recording