Information and Export Decisions: Banks as a conduit of information

Author Name INUI Tomohiko  (Nihon University) /ITO Keiko  (Faculty Fellow, RIETI) /MIYAKAWA Daisuke  (Development Bank of Japan) /SHOJI Keishi  (The House of Representatives)
Creation Date/NO. July 2012 12-J-025
Research Project East Asian Firm-Level Productivity Project
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This paper examines how firms' decision to start exporting is affected by the availability of information on export markets. Unlike existing studies which focus on information sharing among firms, we examine the information provided by firms' top lender banks (main banks). Specifically, using a unique dataset containing information on both Japanese firms' export activities and their main banks' experience in transacting with other exporting firms, we study whether main banks act as a conduit of information on export markets. We find that information spillovers through main banks positively affect client firms' decision to start exporting (extensive margin), implying that information on foreign markets provided by banks substantially reduces the fixed entry cost of exporting. On the other hand, we do not find any evidence that information provided by banks has an effect on the export volume or on the growth rate of exports (intensive margin). Our results highlight that channels of information spillovers other than those examined in the literature hitherto may be of considerable importance.