The impact of credit constraints on exporting firms: Evidence from the provision and subsequent removal of subsidised credit

Kapoor, Mudit, Ranjan, Priya and Raychaudhuri, Jibonayan (2017) The impact of credit constraints on exporting firms: Evidence from the provision and subsequent removal of subsidised credit. World Economy, 40 (12). 2854–2874. ISSN 0378-5920

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Abstract

We study the causal impact of credit constraints on exporters using a natural experiment provided by two policy changes in India, first in 1998 which made small-scale firms eligible for subsidised direct credit, and a subsequent reversal in policy in 2000 wherein some of these firms lost their eligibility. Using firms that were not affected by these policy changes as our control group in each case, we find that credit expansion increased the growth rate of bank borrowing and had a positive effect on exports. The subsequent policy reversal in 2000 had no impact on the growth rate of bank borrowing or on exports.

Item Type: Article
Uncontrolled Keywords: finance,credit constraints,trade,export probability
Faculty \ School: Faculty of Social Sciences > School of Economics
Depositing User: Pure Connector
Date Deposited: 14 Nov 2016 17:00
Last Modified: 16 Nov 2020 00:48
URI: https://ueaeprints.uea.ac.uk/id/eprint/61330
DOI: 10.1111/twec.12498

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