“Credit Constraints and Firm Export: Microeconomic Evidence from Italy” by Susan Zhu
Michigan State University
Using detailed survey data about Italian manufacturing firms, we estimate the impact of credit rationing on firms' export decisions and foreign sales. We find that after controlling for productivity and other important firm characteristics, credit rationed firms have significantly lower probability of exporting and sell substantially less to both foreign and domestic markets than non-rationed firms. We also find that the negative effect of credit rationing is especially strong for firms with small assets.