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IZA Discussion Paper No. 15458
July 2022
Help in a Foreign Land: Internationalized Banks and Firms’ Export

The lack of information is a relevant obstacle to the export activity of small and medium enterprises. This paper analyzes whether banks can support firms’ export by reducing informational asymmetries about foreign markets. We exploit a large sample of Italian firms for which we merge custom data with information on their lender banks. We identify a shock exogenous to firms’ export decisions by relying on preexisting lending relationships and exploiting the acquisition of a firm’s domestic bank by an internationalized banking group. Our results show that, after the acquisition, firms have a significantly higher probability of starting export in countries where the consolidated bank has a foreign branch, which proxies for the amount of information accumulated that can be shared with client firms. Conversely, the effect on the intensive margins of previously-exporting companies is largely insignificant. We interpret these findings as evidence of information spillovers that mainly reduce firms’ fixed entry costs in a foreign market. The analysis also shows that other channels, such as bank credit availability or trade-finance supply, are unlikely to drive our results.

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Mark Fallak
mark.fallak@liser.lu
+352 585-855-526
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Olga Nottmeyer
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+352 585-855-501
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Christina Gathmann
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Das IZA@LISER-Netzwerk ist eine weltweite Gemeinschaft für exzellente Forschung in der Arbeitsmarktökonomie und angrenzenden Fachgebieten. Nach dem Wechsel von Bonn wird das Netzwerk nun am Luxembourg Institute of Socio-Economic Research (LISER) koordiniert.

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