Document Type
Article
Publication Date
1-2015
Publication Title
Applied Economics Letters
Volume
22
Abstract
This article finds that firms’ trade credit, the financing provided by upstream input suppliers along the supply chain, plays an important role in determining firms’ exportation. In a panel data set of manufacturing firms in 25 Eastern European and Central Asian countries between 2001 and 2007, we employ international trade cost shocks to identify the causal impacts of trade credit on firms’ exportation. We find that when trade costs decline, firms with less trade credit increase their exports disproportionately more because of the alleviation of their financing burdens. Results are robust after controlling for bank and other financing channels, country financial development, and the endogeneity of trade credit. Our findings contribute to the empirical identification of financial frictions on firms’ exports and to the role of trade credit on firms’ performance.
Issue
12
First Page
993
Last Page
998
DOI
10.1080/13504851.2014.995353
ISSN
1466-4291
Rights
This is an Accepted Manuscript of an article published by Taylor & Francis Group in Applied Economics Letters on 13/01/2015, available online: https://doi.org/10.1080/13504851.2014.995353
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Recommended Citation
Xiao Wang. "Trade credit, international trade costs and exports: cross-country firm-level evidence" (2015). Economics & Finance Faculty Publications. 14.
https://commons.und.edu/ef-fac/14