Bank Efficiency and Client Firms' Export Behavior: Evidence from firm-bank match-level data

Author Name INUI Tomohiko  (Nihon University) /MIYAKAWA Daisuke  (Development Bank of Japan) /SHOJI Keishi  (House of Representatives)
Creation Date/NO. April 2012 12-E-018
Research Project Research on Measuring Productivity in the Service Industries and Identifying the Driving Factors for Productivity Growth
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This paper empirically studies the impact of banks' efficiency on their client firms' export behavior. Our empirical analysis shows that the marginal impact of the total factor productivity (TFP) of cash-flow constrained firms to the extensive margin of exports increases as the efficiency of top lender banks improves. This channel is important for initiating exports but is neither for sustaining the export status nor the intensive margin. It implies that the main role of banks is to help prominent firms cover the fixed cost associated with the start-up of exports. These results also imply that it is necessary to relate various firm dynamics to the detailed characteristics of the banks having relationships with the firms.