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Bank credit, public financial incentives, tax financial incentives and export performance during the global financial crisis

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  • Luke Emeka Okafor
  • Mita Bhattacharya
  • Nicholas Apergis

Abstract

This paper investigates the extent to which access to credit, public financial incentives and tax financial incentives affect export performance using the EU‐EFIGE/Bruegel‐Unicredit data set, covering firms within Austria, France, Germany, Italy, Spain, Hungary and the UK during the 2008 global financial crisis. The results show that firms receiving credit or benefiting from public financial incentives display higher export intensity and export a greater number of product lines compared to those that did not, especially in countries with better access to credit and/or financial incentives during the crisis. Further, firms benefiting from tax financial incentives show a better export performance compared to those that did not, regardless of the degree of access to credit and/or financial incentives in the country in which they operate. In addition, the effect of access to credit and public finance incentives on export performance is found to be size‐dependent, while the effect of tax financial incentives is not. We suggest that governments should promote publicly funded financial incentives along with conventional schemes, such as R&D subsidies, to promote exports, particularly during a period of financial crisis.

Suggested Citation

  • Luke Emeka Okafor & Mita Bhattacharya & Nicholas Apergis, 2020. "Bank credit, public financial incentives, tax financial incentives and export performance during the global financial crisis," The World Economy, Wiley Blackwell, vol. 43(1), pages 114-145, January.
    • Handle: RePEc:bla:worlde:v:43:y:2020:i:1:p:114-145
    DOI: 10.1111/twec.12848
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    Cited by:

    1. Sara Picas & Pedro Reis & António Pinto & José Luís Abrantes, 2021. "Does Tax, Financial, and Government Incentives Impact Long-Term Portuguese SMEs’ Sustainable Company Performance?," Sustainability, MDPI, vol. 13(21), pages 1-16, October.
    2. Bhattacharya, Mita & Okafor, Luke Emeka & Pradeep, V., 2021. "International firm activities, R&D, and productivity: Evidence from Indian manufacturing firms," Economic Modelling, Elsevier, vol. 97(C), pages 1-13.
    3. Riaz, Kainat & Siddique, Hafiz Muhammad Abubakar & Audi, Marc & Sumaira, Sumaira, 2024. "Impact of Financial Development on Export Performance: Evidence from South Asia," MPRA Paper 122474, University Library of Munich, Germany.
    4. Kirikkaleli, Dervis & Athari, Seyed Alireza, 2020. "Time-frequency co-movements between bank credit supply and economic growth in an emerging market: Does the bank ownership structure matter?," The North American Journal of Economics and Finance, Elsevier, vol. 54(C).
    5. Wee Yeap Lau, 2020. "Bank Credit, Public Financial Incentives, Tax Financial Incentives and Export Performance During the Global Financial Crisis: A Review," Shanlax International Journal of Economics, Shanlax Journals, vol. 8(2), pages 1-4, March.
    6. Quy T. Vo & Tho V. Nguyen & Tin H. Ho & Hien T. T. Bui & Khoa N. A. Le, 2023. "Supportive Policies of Government as the Drivers of SMEs’ Export Performance: A Study in Ho Chi Minh City, Vietnam," SAGE Open, , vol. 13(4), pages 21582440231, November.
    7. Uwizeyemungu, Sylvestre & Poba-Nzaou, Placide & St-Pierre, Josée, 2022. "Back-end information technology resources and manufacturing SMEs’ export commitment: An empirical investigation," International Business Review, Elsevier, vol. 31(5).

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