Exports and credit constraints under incomplete information
Subtitle: theory and evidence from china
By: Robert C. Feenstra, Zhiyuan Li, Miaojie Yu
Contributors: Li, Zhiyuan; Yu, Miaojie; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16940; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16940.
Publisher: National Bureau of Economic Research
Published: 2011
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "This paper examines why credit constraints for domestic and exporting firms arise in a setting where banks do not observe firms' productivities.  To maintain incentive-compatibility, banks lend below the amount needed for first-best production.  The longer time needed for export shipments induces a tighter credit constraint on exporters than on purely domestic firms, even in the exporters' home market.  Greater risk faced by exporters also affects the credit extended by banks.  Extra fixed costs reduce exports on the extensive margin, but can be offset by collateral held by exporting firms.  The empirical application to Chinese firms strongly supports these theoretical results, and we find a sizable impact of the financial crisis in reducing exports"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/16/2011.

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