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| Author: | Zia, B.H. |
| Title: | Export incentives, financial constraints, and the (mis)allocation of credit: Micro-level evidence from subsidized export loans |
| Journal: | Journal of Financial Economics
2008 : FEB, VOL. 87:2, p. 498-527 |
| Index terms: | finance credit exports subsidies companies Pakistan Far East |
| Language: | eng |
| Abstract: | In order to identify the impact and allocation of financial incentives, this paper combines an exogenous shock to the supply of subsidized credit (henceforth as: subs-crd.) with unique loan-level data from the export sector in Pakistan. The removal of subs-crd. causes a significant decline in the exports of privately owned firms, whereas the exports of large publicly listed, and group network firms are not affected. Publicly listed firms make no significant adjustments to their balance sheets, and only their profits are reduced, indicating them to be financially unconstrained. Nearly half of all subs-crd. are assigned to such firms, implying a substantial misallocation of credit etc. The heterogeneous effects across firms are not explained by productivity differences. |
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