TRADE, FINANCE, AND ENDOGENOUS FIRM HETEROGENEITY

• 成果类型: Article
• 署名作者: Bonfiglioli, Alessandra; Crino, Rosario; Gancia, Gino
• 署名单位: University of London; Queen Mary University London; Catholic University of the Sacred Heart; University of London; Queen Mary University London
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1093/jeea/jvx047
• 发表日期: 2019
• 页码: 79-130
• 关键词: INTERNATIONAL-TRADE; comparative advantage; PRODUCTIVITY; constraints; export; frictions; EVOLUTION; DYNAMICS; QUALITY; MARKETS

摘要

We study how financial frictions affect firm-level heterogeneity and trade. We build a model in which productivity differences across monopolistically competitive firms are endogenous and depend on investment decisions at the entry stage. By increasing entry costs, financial frictions lower the exit cutoff and hence the value of investing in bigger projects with more dispersed outcomes. As a result, financial frictions make firms smaller and more homogeneous, and hinder the volume of exports. Export opportunities, instead, shift expected profits to the tail and increase the value of technological heterogeneity. We test these predictions using comparable measures of sales dispersion within 365 manufacturing industries in 119 countries, built from highly disaggregated US import data. Consistent with the model, financial development increases sales dispersion, especially in more financially vulnerable industries; sales dispersion is also increasing in measures of comparative advantage. These results help explaining the effect of financial development and factor endowments on export sales.