Banking Crises and Exports : Lessons from the Past

This paper analyzes the impact of banking crises on manufacturing exports exploiting the fact that sectors differ in their needs for external financing. Relying on data from 23 banking crises episodes involving both developed and developing countries during the period 1980-2000 the authors separate the impact of banking crises on export growth from that of other exogenous shocks (i.e. demand shocks). Their findings show that during a crisis the export of sectors more dependent on external finance grow significantly less than other sectors. However, this result holds only for sectors depending more heavily on banking finance as opposed to inter-firm finance. Furthermore, sectors characterized by higher degree of assets tangibility appear to be more resilient in the face of a banking crisis. The effect of the banking crises on exports is robust and additional to external demand shocks. The effect of the latter is independent and additional to that of a banking shock, and is particularly significant for sectors producing durable goods.

Bibliographic Details

Main Authors:	Iacovone, Leonardo, Zavacka, Veronika
Format:	Policy Research Working Paper biblioteca
Language:	English
Published:	2009-08
Subjects:	ACCESS TO FINANCE, ADVERSE DEMAND, ADVERSE EFFECT, ADVERSE IMPACT, ADVERSE SELECTION, ALLOCATION OF CAPITAL, ALTERNATIVE SOURCES OF FINANCE, BALANCE SHEET, BALANCE SHEET EFFECTS, BALANCE SHEETS, BANK BRANCH, BANKING CRISES, BANKING CRISIS, BANKING SECTOR, BANKING SYSTEM, BENCHMARK, BIASES, BOOK VALUE, BOOK VALUES, BUSINESS CYCLE, CAPITAL EXPENDITURES, CAPITAL INTENSITY, CASH FLOW, CENTRAL BANK, CHECKS, COLLATERAL, COLLATERALS, COMPARATIVE ADVANTAGE, COMPETITIVENESS, COST OF ENTRY, CREDIT CONSTRAINTS, CREDIT CRUNCH, CREDIT MARKETS, CREDIT PROVIDERS, CREDIT PROVISION, CRISIS COUNTRIES, CURRENCY, CURRENCY CRISES, CURRENCY CRISIS, DATA AVAILABILITY, DEBT RELIEF, DEPENDENCE ON TRADE CREDIT, DEPOSITOR, DEREGULATION, DEVALUATION, DEVALUATIONS, DEVELOPING COUNTRIES, DEVELOPMENT BANK, DEVELOPMENT ECONOMICS, DIVERSIFICATION, DOMESTIC BANKING, DUMMY VARIABLE, DURABLE, DURABLE GOODS, DURABLES, ECONOMIC CRISIS, ECONOMIC DEVELOPMENT, ECONOMIC DOWNTURNS, ECONOMIC GROWTH, ECONOMIC OUTLOOK, ECONOMIC RESEARCH, EMERGING MARKETS, ENDOWMENTS, EQUIPMENT, EQUITY MARKET, EXCHANGE RATE, EXCHANGE RATE INSTABILITY, EXCLUSION, EXCLUSIONS, EXPENDITURES, EXPORT GROWTH, EXPORT MARKETS, EXPORT PERFORMANCE, EXPORTER, EXPORTERS, EXPORTS, EXPOSURE, EXTERNAL FINANCE, EXTERNAL FINANCING, EXTERNAL FUNDS, FINANCIAL ASSETS, FINANCIAL CONSTRAINTS, FINANCIAL CRISES, FINANCIAL CRISIS, FINANCIAL DEVELOPMENT, FINANCIAL DISTRESS, FINANCIAL FACTORS, FINANCIAL INSTITUTIONS, FINANCIAL INTERMEDIARIES, FINANCIAL INTERMEDIARY, FINANCIAL INTERMEDIATION, FINANCIAL MARKETS, FINANCIAL MEASURES, FINANCIAL NEEDS, FINANCIAL RESOURCES, FINANCIAL SECTOR, FINANCIAL SUPPORT, FINANCIAL SYSTEM, FINANCIAL SYSTEMS, FIXED COST, FIXED COSTS, FOREIGN BANKS, FOREIGN DEBT, FOREIGN LOANS, FOREIGN MARKET, FOREIGN MARKETS, FUTURE RESEARCH, GDP, GDP PER CAPITA, GROWTH RATE, GROWTH RATES, GUARANTEE SCHEMES, HUMAN CAPITAL, INCOME, INCOME LEVELS, INTANGIBLE, INTERNAL FUNDS, INTERNATIONAL BANK, INTERNATIONAL BANKS, INTERNATIONAL ECONOMICS, INTERNATIONAL TRADE, INVENTORIES, LEGAL ENVIRONMENT, LENDERS, LIBERALIZATIONS, LIQUIDITY, LIQUIDITY PROBLEMS, LONG TERM FINANCING, LONG-TERM INVESTMENTS, MACROECONOMIC SHOCKS, MARKET VALUE, MONETARY FUND, MORAL HAZARD, NATIONAL BANK OF BELGIUM, NATURAL RESOURCES, NON-PERFORMING LOANS, OUTPUT, PER CAPITA INCOME, PHYSICAL CAPITAL, PORTFOLIOS, PRIVATE BORROWERS, PRIVATE CREDIT, REAL GDP, REAL INCOME, RECESSION, RECESSIONS, SIDE EFFECTS, SOLVENCY, SOVEREIGN DEFAULTS, SUNK COSTS, SUPPLY OF FINANCING, SUPPLY SHOCKS, TANGIBLE ASSETS, TRADE CREDIT, TRADE FINANCE, TRADE FLOWS, TRADING, USE OF COLLATERAL, VOLATILITY, WORKING CAPITAL, WORLD ECONOMY, Microdata Set,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090818165636 http://hdl.handle.net/10986/4213
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