The impact of credit constraints on exporting firms: Evidence from the provision and subsequent removal of subsidised credit

Kapoor, M and Ranjan, P and Raychaudhuri, J (2017) The impact of credit constraints on exporting firms: Evidence from the provision and subsequent removal of subsidised credit. The World Economy. (In Press)

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Abstract

We study the causal impact of credit constraints on exporters using a natural experiment provided by two policy changes in India, first in 1998 which made small-scale firms eligible for subsidised direct credit, and a subsequent reversal in policy in 2000 wherein some of these firms lost their eligibility. Using firms that were not affected by these policy changes as our control group in each case, we find that credit expansion increased the growth rate of bank borrowing and had a positive effect on exports. The subsequent policy reversal in 2000 had no impact on the growth rate of bank borrowing or on exports.

Affiliation: Indian School of Business
ISB Creators:
ISB CreatorsORCiD
Kapoor, MUNSPECIFIED
Item Type: Article
Uncontrolled Keywords: credit constraints, exportingfirms
Subjects: Business and Management
Depositing User: Veeramani R
Date Deposited: 29 May 2017 14:48
Last Modified: 29 May 2017 14:48
URI: http://eprints.exchange.isb.edu/id/eprint/534
Publisher URL: http://dx.doi.org/10.1111/twec.12498
Publisher OA policy: http://www.sherpa.ac.uk/romeo/issn/0378-5920/
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