Credit Distribution and Exports: Microeconomic Evidence from China

Credit Rationing and Social Stability: Evidence from 1930s China

Can credit affect social stability? To answer this question, we turn to a natural experiment from 1930s China, where credit contracted as a consequence of the 1933 U.S. Silver Purchase program. Building on extensive archival information, we assemble a novel, hand-collected data set of loan contracts to individual firms as well as labor unrest episodes. We show that the Silver Purchase shock res...

Credit constraints, firm exports and financial development: Evidence from developing countries

This paper examines whether financial development reduces the impact of credit constraints on the exporting decision using firm-level data across 17 developing countries. We approximate credit constraints by a firm’s liquidity ratio. In line with a Melitz-type model with borrowing frictions, the regression analysis confirms that the positive effect of a firm’s liquidity on the exporting probabi...

Macroeconomic Evidence and Microeconomic Foundations

Credit Constraints and Decisions in Exports: Theory under Asymmetric Information

This paper examines why credit constraints for domestic and exporting firms arise in a setting where banks do not observe firms’ productivities. To maintain incentive-compatibility, banks lend below the amount needed for first-best production. The longer time needed for export shipments induces a tighter credit constraint on exporters than on purely domestic firms, even in the exporters’ home m...

Upstreamness, Exports, and Wage Inequality: Evidence from Chinese Manufacturing Data

[Abstract] In this paper we investigate within-firm wage inequality across heterogeneous industries that hold different positions in the domestic value chain, and across heterogeneous firms that have different exposure to trade. We find that the wage inequality problem is more severe in upstream industries than in downstream ones, and among firms with greater exposure to trade (i.e., larger exp...