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Credit constraints and exports: evidence for German manufacturing enterprises

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Abstract:

ThisĀ  study uses newly available enterprise-level data for firms from manufacturing industries in Germany to test for the link between credit constraints, measured by a credit-rating score from the leading credit-rating agency Creditreform, and exports. In line with hypotheses from a theoretical model, we find a positive link between a better credit-rating score of a firm and both the probability that the firm is an exporter and a higher share of exports in total sales. This link, though statistically highly significant, is not very strong from an economic point of view. While empirical evidence for the hypothesis that credit-constrained firms are less likely to start to export is, at best, weak, we find no evidence for a statistically significant difference in credit-rating scores between firms that stopped to export and firms that continued to export.

Keywords: F14; Germany; credit constraints; exports

Document Type: Research Article

DOI: https://doi.org/10.1080/00036846.2013.839866

Affiliations: Leuphana University, Lueneburg, Germany

Publication date: 2014-01-22

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