Are Banks Engines of Export? Financial Structures and Export Dynamics
This paper studies the impact of financial structures on the dynamics of the export sector using rich data from over 60 countries. The results reveal that bank-oriented financial systems boost the size of the export sector more than market-oriented...
| Main Authors: | , , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/891251540473620564/Are-Banks-Engines-of-Export-Financial-Structures-and-Export-Dynamics http://hdl.handle.net/10986/30641 |
| Summary: | This paper studies the impact of
financial structures on the dynamics of the export sector
using rich data from over 60 countries. The results reveal
that bank-oriented financial systems boost the size of the
export sector more than market-oriented financial systems.
However, especially in middle- and low-income countries,
this effect mostly stems from banks slowing down
exporters' exit rather than promoting firms' entry
into export. The reduced exit from the export sector appears
to reflect domestic banks' tendency to evergreen loans
to exporters ("soft budget constraint") more than
banks' buffering role in difficult times. Foreign banks
mitigate this effect and enhance the dynamism of the export sector. |
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