Do Subsidized Export Loans Increase Exports?

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Title:

Do Subsidized Export Loans Increase Exports?

Number:

17/20

Author(s):

Yusuf Emre Akgündüz, Süleyman Hilmi Kal, Huzeyfe Torun

Language:

English

Date:

December 2017

Abstract:

Turkey's export rediscount credit programme provides credit to exporting firms that is both easy to acquire and is offered at a low interest rate. We follow the performance of firms that first received the credit in 2012 when the amount of credit provided went up dramatically in 2012. We use propensity score mathing to construct a control group of firms with which we compare the credit-receiving firms before and after 2012 in a difference-in-differences framework. These firms have increased their exports substantially in the following years compared to the matched firms with similar propensities to receive the rediscount credit. We find that firms that received the rediscount credit increased their exports by 65% and total sales by 19% compared to matched firms. We find no statistically significant effects on domestic sales and profits. We also find suggestive evidence that the effects fade away after a certain amount of credits.

Keywords:

Subsidized credits, Exporting firms, Central banking, Propensity score matching

JEL Codes:

F13; F14; L25; O24; E58
Do Subsidized Export Loans Increase Exports?