eprintid: 25646
rev_number: 8
eprint_status: archive
userid: 1482
importid: 105
dir: disk0/00/02/56/46
datestamp: 2018-05-03 14:27:02
lastmod: 2021-04-02 15:57:20
status_changed: 2018-05-03 14:27:02
type: article
metadata_visibility: show
creators_name: Chaney, Thomas
creators_idrefppn: 200825801
creators_affiliation: Toulouse School of Economics, University of Toulouse Capitole, 21 Allée de Brienne, 31000 Toulouse, France
title: Liquidity constrained exporters
ispublished: pub
subjects: subjects_ECO
abstract: I propose a model of international trade with liquidity constraints. If firms must pay a fixed entry cost in order to access foreign markets, and if they face liquidity constraints to finance these costs, only those firms that have sufficient liquidity are able to export. A set of firms could profitably export, but are prevented from doing so because they lack sufficient liquidity. More productive firms that generate large liquidity from their domestic sales, and wealthier firms that inherit a large amount of liquidity, are more likely to export. This model offers a potential explanation for the apparent lack of sensitivity of exports to exchange rate fluctuations. When the exchange rate appreciates, existing exporters lose competitiveness abroad, and are forced to reduce their exports. At the same time, the value of domestic assets owned by potential exporters increases. Some liquidity constrained exporters start exporting. This dampens the anti-competitiveness impact of a currency appreciation. Under some conditions, it may reverse it altogether and increase aggregate exports. In this sense, the model is able to rationalize the co-existence of competitive devaluations and competitive revaluations.
date: 2016-11
date_type: published
publisher: Elsevier
id_number: 10.1016/j.jedc.2016.03.010
official_url: http://tse-fr.eu/pub/31922
faculty: tse
divisions: tse
keywords: International trade
keywords: Liquidity constraint
keywords: Heterogeneous firms
language: en
has_fulltext: FALSE
doi: 10.1016/j.jedc.2016.03.010
subjectsJEL: JEL_F1
view_date_year: 2016
full_text_status: none
publication: Journal of Economic Dynamics and Control
volume: 72
place_of_pub: doi.org/10.1016/j.jedc.2016.03.010
pagerange: 141-154
refereed: TRUE
issn: 0165-1889
oai_identifier: oai:tse-fr.eu:31922
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oai_lastmod: 2019-01-23T13:20:20Z
oai_set: tse
site: ut1
citation:   Chaney, Thomas <https://www.idref.fr/200825801>  (2016) Liquidity constrained exporters.    Journal of Economic Dynamics and Control, 72.  pp. 141-154.