Financial Shocks and Firm Exports: A natural experiment approach with a massive earthquake

Daisuke Miyakawa, Kaoru Hosono, Taisuke Uchino, Arito Ono, Hirofumi Uchida and Iichiro Uesugi

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: This paper investigates the effect of financial shocks on firms' exports. To circumvent endogeneity problems, we utilize the natural experiment provided by the Great Hanshin-Awaji Earthquake in 1995. Using a unique firm-level dataset, we single out the effect of exogenous financial shocks on firms' exports by focusing on exports of firms that were not directly damaged by the earthquake but that transacted with damaged banks as their main banks. Our main findings are twofold. First, as for the extensive margins of exports, the probabilities of starting exports or of expanding export destination areas were smaller for undamaged firms that transacted with a damaged main bank than for that transacted with an undamaged main bank. Second, as for the intensive margins of exports, undamaged firms that transacted with a damaged main bank had a lower export-to-sales ratio than that transacted with an undamaged main bank. These findings lend support to the existence of the financial constraint on firm exports.

Pages: 43 pages
Date: 2014-02
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (5)

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https://www.rieti.go.jp/jp/publications/dp/14e010.pdf (application/pdf)

Related works:
Working Paper: Financial Shocks and Firm Exports: A Natural Experiment Approach with a Massive Earthquake (2016)
Working Paper: Financial Shocks and Firm Exports: A Natural Experiment Approach with a Massive Earthquake (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:14010

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