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Financial Development and Sustainable Exports: Evidence from Firm‐product Data
Author(s) -
Jaud Melise,
Kukenova Madina,
Strieborny Martin
Publication year - 2015
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12224
Subject(s) - product (mathematics) , finance , production (economics) , economics , business , macroeconomics , mathematics , geometry
We combine a novel measure of export‐related financial needs at the product level with a unique database of firm‐product export data (including names of the exporting firms) from five developing countries. Using the tools of survival analysis and taking into account firms' and products’ heterogeneity, we then examine the impact of financial development on the long‐term trade. Finance matters for sustainable export performance, as goods with higher export‐related financial needs disproportionately benefit from better financial development. Our results complement existing literature on finance and trade, which has relied on production‐based measures of financial dependence at the industry or firm level.