Financial development, exporting and firm heterogeneity in Chile
Using plant-level data from the manufacturing sector of Chile for the period 1990–2000, this paper examines the effect of financial development on the probability of exporting at the plant level, with a special focus on the heterogeneous responses of plants with different characteristics. The main results are that an improvement in financial development increases the probability of exporting of more productive plants and those with foreign ownership operating in manufacturing sectors that are more dependent on external finance. Our estimates also show that financial development does not appear to improve the probability of exporting for relatively smaller and younger plants. This result suggests that, at least for the case of exporting in Chile, smaller and younger plants are not necessarily more likely to benefit than larger and older plants from improvements in access to credit.
KeywordsExporting Financial development Credit constraints Plant-level data Chile
JEL ClassificationF14 O16 O54
We would like to thank Rolando Campusano for excellent research assistance, and two anonymous referees and participants at the 6th Workshop of the International Study Group on Exports and Productivity (ISGEP) held at Leuphana University, Lüneburg, Germany, on September 28–30, 2011 for helpful comments on an earlier version of this paper. Alvarez thanks also the Millennium Science Initiative (Project NS 100017 “Centro Intelis”) for their financial support.
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