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Financing Time to Trade

Author

Listed:
  • Pauline Bourgeon

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Jean-Charles Bricongne

    (Centre de recherche de la Banque de France - Banque de France)

Abstract

This paper provides new firm-level evidence of the impact of financial frictions on international trade. First, by drawing on a unique instrument to capture financial frictions at firm level, we address concerns about endogenous measures of firms' financial constraints. Second, we test empirically the role of distance and long trading time in reinforcing the negative effect of financial frictions on firms' exports. We use detailed customs and balance sheet data combined with a unique dataset on payment incidents to conduct this empirical analysis. We find that financial frictions significantly reduce firm's export sales. Our estimations show a significant effect of distance and trading time in reinforcing the negative effect of financial frictions on export sales.

Suggested Citation

  • Pauline Bourgeon & Jean-Charles Bricongne, 2016. "Financing Time to Trade," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01373461, HAL.
    • Handle: RePEc:hal:cesptp:halshs-01373461
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01373461
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    References listed on IDEAS

    as
    1. Kalina Manova, 2013. "Credit Constraints, Heterogeneous Firms, and International Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(2), pages 711-744.
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    7. Bricongne, Jean-Charles & Fontagné, Lionel & Gaulier, Guillaume & Taglioni, Daria & Vicard, Vincent, 2012. "Firms and the global crisis: French exports in the turmoil," Journal of International Economics, Elsevier, vol. 87(1), pages 134-146.
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    Cited by:

    1. Md Deluair Hossen, 2023. "Financing Costs, Per-Shipment Costs and Shipping Frequency: Firm-Level Evidence from Bangladesh," Papers 2303.04223, arXiv.org.
    2. Andrea Ciani & Francesca Bartoli, 2020. "Export quality differentiation under credit constraints," The World Economy, Wiley Blackwell, vol. 43(5), pages 1398-1433, May.

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    More about this item

    Keywords

    distance; financial frictions; firms' exports; international trade; trading time;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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