ESRI Discussion Paper Series No.297
Firms' Export Behavior and the Role of Bank' Overseas Information

Tomohiko Inui
Professor, Faculty of Economics, Nihon University, and Economic and Social Research Institute, Cabinet Office
Keiko Ito
Professor, School of Economics, Senshu University
Daisuke Miyakawa
Associate Senior Economist, Research Institute of Capital Formation, Development Bank of Japan
Keishi Shoji
Researcher, The House of Representatives

Abstract

This paper examines how firms’ decision to start exporting is affected by the availability of information on export markets. Unlike existing studies which focus on information sharing among firms, we are interested in the information provided by firms’ main bank. Specifically, using a unique dataset containing information on both Japanese firms’ export activities and their main banks’ experience in transacting with other exporting firms, we examine whether main banks act as a conduit of information on export markets. We find that information spillovers through main banks positively affect client firms’ decision to start exporting (extensive margin), implying that information on foreign markets provided by banks substantially reduces the fixed entry cost of exporting. On the other hand, we do not find any evidence that information provided by banks has an effect on the export volume or on the growth rate of exports (intensive margin). Our results highlight that channels of information spillovers other than those examined in the literature so far may be of considerable importance.


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  2. page1
    Abstract
  3. page2
    1. Introduction
  4. page5
    2. Empirical Strategy
    1. page5
      2.1 The Main Bank System in Japan
    2. page6
      2.2 Empirical Approach
  5. page9
    3. Data and Descriptive Statistics
    1. page9
      3.1 Data Description
    2. page10
      3.2 Variables
  6. page13
    4. Estimation Results
    1. page13
      4.1 The decision to enter specific markets
    2. page15
      4.2 Export volume and export growth
    3. page16
      4.3 Robustness checks
  7. page17
    5. Concluding Remarks
  8. page20
    References
  9. page23
    Appendix: The multilateral TFP index
  10. page24
    Table 1: Summary statistics
  11. page25
    Table 2: Distribution of NUM_CLIENT and BANKINFO in 2000
  12. page26
    Table 3: Correlation matrix
  13. page27
    Table 4: Distribution of sample firms by industry and year
  14. page28
    Table 5: Random-effect panel probit estimation results for extensive margin
  15. page29
    Table 6: Panel logit estimation results for extensive margin
  16. page30
    Table 7: Random-effect panel probit estimation results for extensive margin by destinationregion
  17. page31
    Table 8: Fixed-effect panel estimation results for intensive margin
  18. page32
    Table 8: Fixed-effect panel estimation results for intensive margin --- continued ---
  19. page33
    Table 9: Random-effect panel probit estimation results for extensive margin(NUM_EXOPRTER)
  20. page34
    Table 10: Random-effect panel probit estimation results for extensive margin (Sample splitby NUM_CLIENT)
  21. page35
    Table 11: Random-effect panel probit estimation results for extensive margin (Subsamplenot being affected by M&A)
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