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The open economy balance sheet channel and the exporting decisions of firms: evidence from the Brazilian crisis of 1999

Bougheas, Spiros; Mizen, Paul; Silva, Simone

Authors

PAUL MIZEN paul.mizen@nottingham.ac.uk
Professor of Monetary Economics

Simone Silva simone.silva@murraystate.edu



Abstract

We consider the impact of the Brazilian crisis of 1999 on the extensive and intensive margin of exporters versus non-exporters through the open economy balance sheet channel. Using an open economy balance sheet channel model with firm heterogeneity, we explore predictors that firms will engage in global markets. Our results based on a detailed firm-level panel of data for Brazilian 10,573 firms for the period 1996–2007, show that the decision to export and overall growth of sales for exporting firms is driven by size, the debt ratio, the current ratio and operating costs as well as the direct impact of the crisis itself. The findings suggest that the mechanism is driven by the response of the credit market to the creditworthiness of firms as it is by changing terms of trade.

Journal Article Type Article
Publication Date 2015-10
Journal Oxford Economic Papers
Print ISSN 0030-7653
Electronic ISSN 1464-3812
Publisher Oxford University Press
Peer Reviewed Peer Reviewed
Volume 67
Issue 4
Pages 1096-1122
APA6 Citation Bougheas, S., Mizen, P., & Silva, S. (2015). The open economy balance sheet channel and the exporting decisions of firms: evidence from the Brazilian crisis of 1999. Oxford Economic Papers, 67(4), 1096-1122. https://doi.org/10.1093/oep/gpv046
DOI https://doi.org/10.1093/oep/gpv046
Publisher URL http://oep.oxfordjournals.org/content/early/2015/06/26/oep.gpv046.full
Copyright Statement Copyright information regarding this work can be found at the following address: http://eprints.nottingh.../end_user_agreement.pdf

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Copyright Statement
Copyright information regarding this work can be found at the following address: http://eprints.nottingham.ac.uk/end_user_agreement.pdf





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