Exports and Financial Shocks / Mary Amiti, David E. Weinstein.

Format:

Book

Author/Creator:

Amiti, Mary.

Contributor:

National Bureau of Economic Research.

Weinstein, David E.

Series:

Working Paper Series (National Bureau of Economic Research) no. w15556.

NBER working paper series no. w15556

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2009.

Summary:

A striking feature of many financial crises is the collapse of exports relative to output. In the 2008 financial crisis, real world exports plunged 17 percent while GDP fell 5 percent. This paper examines whether deteriorations in bank health can help explain the large drops in exports relative to output in the recent crisis. Our paper is the first to establish a causal link between the health of banks providing trade finance and growth in a firm's exports relative to its domestic sales. We overcome measurement and endogeneity issues by using a unique data set, covering the Japanese financial crises from 1990 through 2010, which enables us to match exporters with the main bank that provides them with trade finance. Our point estimates are economically and statistically significant, suggesting that the health of financial institutions is an important determinant of firm-level exports during crises.

Notes:

Print version record

December 2009.