Banking Crises and Exports : Lessons from the Past
This paper analyzes the impact of banking crises on manufacturing exports exploiting the fact that sectors differ in their needs for external financing. Relying on data from 23 banking crises episodes involving both developed and developing countri...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090818165636 http://hdl.handle.net/10986/4213 |
| Summary: | This paper analyzes the impact of
banking crises on manufacturing exports exploiting the fact
that sectors differ in their needs for external financing.
Relying on data from 23 banking crises episodes involving
both developed and developing countries during the period
1980-2000 the authors separate the impact of banking crises
on export growth from that of other exogenous shocks (i.e.
demand shocks). Their findings show that during a crisis the
export of sectors more dependent on external finance grow
significantly less than other sectors. However, this result
holds only for sectors depending more heavily on banking
finance as opposed to inter-firm finance. Furthermore,
sectors characterized by higher degree of assets tangibility
appear to be more resilient in the face of a banking crisis.
The effect of the banking crises on exports is robust and
additional to external demand shocks. The effect of the
latter is independent and additional to that of a banking
shock, and is particularly significant for sectors producing
durable goods. |
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