THESIS
2012
vii, 33 p. ; 30 cm
Abstract
This paper explores how to allocate credit supply within an industry to increase
aggregate export intensity ( export-to-sales ratio) at industry level. We build a
heterogeneous-firm trade model based on Chaney (2005) by introducing credit supply
and intra-industry productivity distribution to investigate the effect of credit distribution
on export behavior. The key finding is that credit distribution affects export intensity and
number of exporters differently, depending on the inherent characteristics of industry: for
industries with relatively small foreign market penetration cost, more dispersed credit
distribution decreases the industry's export intensity; conversely, for industries with
relatively high foreign market penetration cost, the dispersion of credit supply increas...[
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This paper explores how to allocate credit supply within an industry to increase
aggregate export intensity ( export-to-sales ratio) at industry level. We build a
heterogeneous-firm trade model based on Chaney (2005) by introducing credit supply
and intra-industry productivity distribution to investigate the effect of credit distribution
on export behavior. The key finding is that credit distribution affects export intensity and
number of exporters differently, depending on the inherent characteristics of industry: for
industries with relatively small foreign market penetration cost, more dispersed credit
distribution decreases the industry's export intensity; conversely, for industries with
relatively high foreign market penetration cost, the dispersion of credit supply increases
export intensity and number of exporters. We test the theoretical prediction with Chinese
firm-level data by using both variance and dispersion ratio as indicators for distribution
of credits. To categorize accesses of external finance, we employ ownership structure and
bank loans ratio. The empirical results are consistent with the theoretical predictions, and
we find significant impacts of intra-industry credit distribution on export. Our study
provides an important policy implication for credit allocation, as it points out that not
only the aggregate credit supply (as indicated by the previous literature), but also its
distribution impacts exporting behavior. We can encourage exports by reallocation of
credit supply in a more efficient way.
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