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Credit Access and Market Access: Evidence From a Portuguese Credit Guarantee Scheme

Author

Listed:
  • Custodio, Claudia
  • Hansman, Christopher
  • Mendes, Bernardo

Abstract

We show that credit access is a key barrier to exporting. We analyze a government scheme that provided credit guarantees to Portuguese SMEs. Regression discontinuity estimates, based on program eligibility criteria, indicate that qualifying firms are more likely to export and to expand their export activity. Credit access has persistent effects, disproportionately impacting not-yet exporters and smaller firms. Our results support international trade models in which credit allows firms to overcome sunk entry costs, leading to hysteresis in trade. We propose two sources of these costs — trust-building and quality upgrading — and show that government guarantees promote access to foreign markets.

Suggested Citation

  • Custodio, Claudia & Hansman, Christopher & Mendes, Bernardo, 2024. "Credit Access and Market Access: Evidence From a Portuguese Credit Guarantee Scheme," CEPR Discussion Papers 19049, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:19049
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    More about this item

    Keywords

    Exports; Trade;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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