How Local Financial Market Imperfection and Exchange Rates Relate to Decisions to Export
by Dingming Liu, Pu Chen*, Chunyang Wang
ARTICLE | Annals of Economics and Finance | No. 2, Vol. 16, 2015
Abstract
Theoretic and empirical studies argue that the differences in financial mar- ket development contribute to varying export levels in international trade. We illustrate this idea by studying a heterogeneous firm model expanded to in- clude a borrowing constraint, and we find that in a developed financial system a change in interest rate exerts a significant effect on exports, due to the high dependence on external financing. Conversely, in less developed financial sys- tems, where producers typically have to rely on internally generated capital, changes in the interest rate do not generate a significant effect on export levels.
Popular Articles
-
International Student Profile: Kevin Kurnia
Oct 12 2017
-
Start your application to join PHBS!
Sep 18 2018
-
PHBS Opening a Campus in UK: Se...
Feb 22 2017
Latest News
-
Peking University HSBC Business S...
Time:Dec 20 2019
-
Studious and Aspiring | Dean Hai...
Time:Dec 20 2019
-
PHBS Holds the Second PHBS Works...
Time:Dec 19 2019
Campus Events