Bank Internationalization and Firm Exports: Evidence from Matched Firm-Bank Data

52 Pages Posted: 12 May 2016

Date Written: February 25, 2016

Abstract

In this paper we investigate whether new exporter firms have a higher probability of starting to export to the countries where their financing banks have already established their branches. The underlying mechanism we hypothesize is based on the transmission of foreign market knowledge from banks to firms, so as to cut down information barriers to international trade. In those countries where such information is arguably more precious to the firm, we found a significant positive relationship between a firm’s probability of beginning to export to one market, and the presence in the same market of a branch of the firm’s financing bank. Coherently with the mechanism hypothesized, we find a stronger effect for closer firm-bank relationships, and when banks have established their branches abroad over a longer time period.

Keywords: Internationalization, Export, Bank-Firm Relationships

JEL Classification: F10, G21

Suggested Citation

Bronzini, Raffaello and D'Ignazio, Alessio, Bank Internationalization and Firm Exports: Evidence from Matched Firm-Bank Data (February 25, 2016). Bank of Italy Temi di Discussione (Working Paper) No. 1055, Available at SSRN: https://ssrn.com/abstract=2777973 or http://dx.doi.org/10.2139/ssrn.2777973

Raffaello Bronzini (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

Alessio D'Ignazio

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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