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Overseas Market Information And Firms' Export Decisions

Author

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  • Tomohiko Inui
  • Keiko Ito
  • Daisuke Miyakawa

Abstract

This paper examines how firms' decision to start exporting is affected by the availability of information on export markets. Unlike existing studies that focus on information sharing among firms, we are interested in the information provided by firms' main bank. Specifically, using a unique data set containing information on both Japanese firms' export activities and the experience of their main bank (i.e., their top lender bank) in transacting with other exporting firms, we examine whether main banks act as a conduit of information on export markets. We find that information spillovers through main banks positively affect client firms' decision to start exporting (extensive margin), implying that information on foreign markets provided by banks substantially reduces the fixed entry cost of exporting. On the other hand, we do not find any evidence that information provided by banks has an effect on the export volume or on the growth rate of exports (intensive margin). Our results highlight that channels of information spillovers other than those examined in the literature so far may be of considerable importance . ( JEL F10, F14, G21)

Suggested Citation

  • Tomohiko Inui & Keiko Ito & Daisuke Miyakawa, 2015. "Overseas Market Information And Firms' Export Decisions," Economic Inquiry, Western Economic Association International, vol. 53(3), pages 1671-1688, July.
    • Handle: RePEc:bla:ecinqu:v:53:y:2015:i:3:p:1671-1688
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    File URL: http://hdl.handle.net/10.1111/ecin.2015.53.issue-3
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    Citations

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    Cited by:

    1. Oum, Tae Hoon & Wang, Kun & Yan, Jia, 2019. "Measuring the effects of open skies agreements on bilateral passenger flow and service export and import trades," Transport Policy, Elsevier, vol. 74(C), pages 1-14.
    2. Toshihiro Okubo & Tetsuji Okazaki & Eiichi Tomiura, 2022. "Industrial cluster policy and transaction networks: Evidence from firm‐level data in Japan," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(4), pages 1990-2035, November.
    3. Steven Poelhekke, 2016. "Financial Globalization and Foreign Direct Investment," Tinbergen Institute Discussion Papers 16-098/VIII, Tinbergen Institute.
    4. Jamal Ibrahim Haidar, 2022. "Internalization of externalities in international trade," Empirical Economics, Springer, vol. 63(1), pages 469-497, July.
    5. Steven Poelhekke, 2016. "Financial Globalization and Foreign Direct Investment," Tinbergen Institute Discussion Papers 16-098/VIII, Tinbergen Institute.

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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