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Title: Dissecting the Effect of Credit Supply on Trade
Authors: Schnabl, Philipp
Paravisini, Daniel
Rappoport, Veronica
Wolfenzon, Daniel
Issue Date: 4-Nov-2011
Series/Report no.: FIN-11-008
Abstract: We estimate the elasticity of exports to credit using matched customs and rm-level bank credit data from Peru. To account for non-credit determinants of exports, we compare changes in exports of the same product and to the same destination by firms borrowing from banks differentially affected by capital flow reversals during the 2008 financial crisis. A 10% decline in credit reduces by 2.3% the intensive margin of exports, by 3.6% the number of firms that continue supplying a product- destination, but has no effect on the entry margin. Overall, credit shortages explain 15% of the Peruvian exports decline during the crisis.
URI: http://hdl.handle.net/2451/31297
Appears in Collections:Finance Working Papers

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