Template-type: ReDIF-Paper 1.0
Author-Name: Ndubuisi, Gideon
Author-Email: ndubuisi@merit.unu.edu
Author-Workplace-Name: UNU-MERIT
Author-Name: Konte, Maty
Author-Email: konte@merit.unu.edu
Author-Workplace-Name: UNU-MERIT
Title: Credit constraints and trade performance: Does trust-based social capital 
	 matter?
Abstract: It has been extensively argued that trust-based social capital expands 
	 access to credit. We embed this argument in the "credit-constrained 
	 literature", which documents inter-sector differences in financial 
	 vulnerability. We argue that financially constrained sectors are 
	 relatively better off in countries with a higher social trust level. 
	 Employing bilateral trade data comprising 50 countries' exports in 27 
	 sectors during 1996-2008, we find that countries with a higher social 
	 trust level export more in financially vulnerable sectors because they 
	 export more products to each destination (extensive margin) and sell 
	 more of each product (intensive margin), which is in line with our 
	 hypothesis. With the exception of the intensive margin, these results 
	 are robust to a battery of sensitivity checks, including controlling for 
	 formal financing.
Classification-JEL: F10, F14, D70
Keywords: Social Trust, Trade, Trade Margins, Credit Constraints
Series: UNU-MERIT Working Papers
Creation-Date: 20191108
Number: 2019-046
File-URL: https://unu-merit.nl/publications/wppdf/2019/wp2019-046.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2019046