Financial vulnerability and export dynamics - Archive ouverte HAL Access content directly
Book Sections Year : 2015

Financial vulnerability and export dynamics

Abstract

This study documents the implications of financial vulnerability for export diversification in developing economies. Financial crises, by increasing the incidence of sunk costs of entry into exporting, reduce firm export dynamics. Financially-vulnerable exporters are not able to fully realize economies of scale in production and access better-sophisticated technologies. The number of products and destinations per exporter are therefore likely to decrease in times of crisis. We use a comprehensive crosscountry dataset on export dynamics, with data covering 1997-2011 for 34 developing countries to investigate this issue. Building on the generalized difference-indifferences procedure proposed by Rajan & Zingales (1998) to remove any endogeneity bias, the results point to a negative and economically large effect of financial vulnerability on export diversification. Financial crises reduce export dynamics disproportionately more in financially dependent industries. This effect is less pronounced in countries with initially more open capital account, suggesting that portfolio inflows are good substitutes for underdeveloped domestic financial markets.
Fichier principal
Vignette du fichier
Book of Proceedings_Istanbul_2015_Final-pages-272-286.pdf (5.3 Mo) Télécharger le fichier
Origin Publisher files allowed on an open archive
Loading...

Dates and versions

hal-01889999 , version 1 (08-10-2018)

Identifiers

  • HAL Id : hal-01889999 , version 1

Cite

Mélise Jaud, Youssouf Kiendrebeogo, Marie-Ange Véganzonès-Varoudakis. Financial vulnerability and export dynamics. Ilko Vrankic, Goran Kozina and Vladimir Kovsca. Economic and Social Development 9th International Scientific Conference, pp 264-278, 2015. ⟨hal-01889999⟩

Relations

53 View
82 Download

Share

Gmail Mastodon Facebook X LinkedIn More