Table 2: Banks, stock markets, and investment needs

||(1)|(2)|(3)|(4)|(5)|(6)|
|---|---|---|---|---|---|---|
|Dep. var.: Survival|1y|5y|10y|1y|5y|10y|
|investment needs _×_ banks|-0.011|0.034|0.056<sup>_b_</sup>||||
||(0.047)|(0.033)|(0.027)||||
|investment needs _×_ stock markets||||0.034|0.062<sup>_b_</sup>|0.057<sup>_a_</sup>|
|||||(0.040)|(0.026)|(0.020)|
|investment needs _×_ GDPpc|-0.004|-0.005|-0.010|0.006|-0.002|0.002|
||(0.018)|(0.012)|(0.010)|(0.017)|(0.011)|(0.009)|
|investment needs _×_ real exchange rate|-0.642|-0.396|-0.407<sup>_c_</sup>|-1.933<sup>_b_</sup>|-0.703|-0.420|
||(0.464)|(0.258)|(0.215)|(0.874)|(0.638)|(0.528)|
|initial export|0.020<sup>_a_</sup>|0.016<sup>_a_</sup>|0.012<sup>_a_</sup>|0.020<sup>_a_</sup>|0.016<sup>_a_</sup>|0.012<sup>_a_</sup>|
||(0.002)|(0.002)|(0.001)|(0.002)|(0.002)|(0.001)|
|total export|0.041<sup>_a_</sup>|0.032<sup>_a_</sup>|0.024<sup>_a_</sup>|0.041<sup>_a_</sup>|0.032<sup>_a_</sup>|0.024<sup>_a_</sup>|
||(0.001)|(0.001)|(0.001)|(0.001)|(0.001)|(0.001)|
|number of suppliers|0.003<sup>_a_</sup>|-0.001<sup>_a_</sup>|-0.004<sup>_a_</sup>|0.003<sup>_a_</sup>|-0.001<sup>_b_</sup>|-0.004<sup>_a_</sup>|
||(0.000)|(0.000)|(0.000)|(0.000)|(0.001)|(0.000)|
|multiple spell|-0.042<sup>_a_</sup>|-0.268<sup>_a_</sup>|-0.351<sup>_a_</sup>|-0.044<sup>_a_</sup>|-0.274<sup>_a_</sup>|-0.360<sup>_a_</sup>|
||(0.008)|(0.015)|(0.021)|(0.008)|(0.016)|(0.022)|
|phys. cap. intensity _×_ physical capital|-0.139<sup>_b_</sup>|-0.166<sup>_a_</sup>|-0.100<sup>_b_</sup>|-0.047|-0.080|-0.023|
||(0.067)|(0.047)|(0.040)|(0.079)|(0.053)|(0.043)|
|hum. cap. intensity _×_ human capital|0.274<sup>_a_</sup>|0.265<sup>_a_</sup>|0.221<sup>_a_</sup>|0.279<sup>_a_</sup>|0.289<sup>_a_</sup>|0.244<sup>_a_</sup>|
||(0.027)|(0.021)|(0.019)|(0.031)|(0.024)|(0.021)|
|Observations|252,147|252,147|252,147|243,509|243,509|243,509|
|R-squared|0.263|0.546|0.692|0.254|0.547|0.695|
|Country-Time FE|yes|yes|yes|yes|yes|yes|
|Product FE|yes|yes|yes|yes|yes|yes|

Dependent variable is the probability of export survival of product _k_ from industrial sector (industry) _i_ exported by country _c_ to the USA. Export survival probability is measured _l_ years after the beginning of export spell, with _l_ = 1 in columns (1) and (4), _l_ = 5 in columns (2) and (5), and _l_ = 10 in columns (3) and (6). The regressions are estimated by OLS and contain a full set of fixed effects at the product level and the (exporting country)*time level, with time referring to the beginning of a given export spell. Investment needs is defined at the industry level _i_ and represents the difference between capital expenditures and cash flow, divided by capital expenditures. Banks represents the ratio between credit from deposit-taking banks to the private sector and GDP in a given exporting country _c_ . Stock markets is the ratio between stock market capitalization and GDP of a given exporting country _c_ . Other variables entering regressions directly or as a part of interaction terms include GDPpc (GDP per capita in country _c_ reported in constant 2005 US dollars), real exchange rate (nominal effective exchange rate divided by price deflator or index of costs of country _c_ ), initial export (export value of a product _k_ exported by country _c_ to the US in the initial year of exporting), total export (value of all exports from country _c_ to the world market), number of suppliers (number of countries exporting product _k_ to the US), multiple spell (dummy variable that equals one if country _c_ exports product _k_ to the US during more than one export spell), and interaction terms between physical and human capital endowments of country _c_ and the corresponding capital intensities at the industry level. All time-varying explanatory variables are measured at the beginning of the export spell. Robust standard errors are clustered at the (exporting country)*time level, with time referring to the beginning of a given export spell. _a_ , _b_ , _c_ denote statistical significance at the 1%, 5%, and 10% level, respectively.

The results reported in Table 2 suggest that stock markets play a more robust role than banks when it comes to facilitating exports of products with high investment needs. While banks have a significant role for the export survival only at the longest horizon of ten years (third column), stock markets promote export survival of these products at horizons of both five and ten years (fifth and sixth column). As for the non-financial channels, economic development seems to play no particular role in promoting exports of products with high investment needs as documented by the insignificant results for the interaction 22