Please join us in congratulating Dr. Kwan Yong Lee, Associate Professor in the Department of Economics & Finance, for his presentation on his paper titled “Financial Dependence and Exports: Incumbents or Entrants?” at Western Economic Association International Virtual Conference.
Using firm-level customs data from 51 countries at different levels of development, we explore differential impacts of access to finance on incumbent and new exporters. Consistent with the literature, firms in sectors more dependent on external finance have higher exports in financially more developed countries. This effect, however, occurs entirely through entrants, with no effect found for incumbents. The trade response of entrants works primarily through the extensive margin (number of exporters) rather than the intensive margin (average size). We further find access to external finance affects exporter entry rates while it does not affect exporter exit rates.