Trade and credit: Revisiting the evidence

Abstract

This paper explores the effects of bank lending shocks on the export behavior of Spanish firms. For that purpose, we combine data on exports at the firm-product-destination level with a matched bank-firm dataset incorporating information on the universe of corporate loans from 2002 to 2013. Armed with this dataset, we identify bank-year specific credit supply shocks and estimate their impact on firms' exports at the product-destination level. According to our estimates, credit supply shocks have sizable effects on both the intensive margin (amount exported) and the extensive margin of trade (decision to export).