Department of Industrial Economics, Tamkang University
This paper assesses the impacts of financial sector volatility and banking market structure on industrial exports. By utilizing the specification of Rajan and Zingales (1998) on the cross-country, cross-industry data from Manova (2008), we find that financial sector volatility,
measured as the standard deviation of the growth of private credit, and banking market
structure, measured as the share of the three largest banks’ assets in a country, respectively exert significantly negative and positive impacts on industrial exports, particularly so for those industries that are more external financially dependent. The findings are robust to a variety of sensitivity analysis, and thus lend support to the notion that a more stable and
concentrated banking system is important to the exports of those industries that rely more on external finance.
2012 International conference on trade, industrial and regional economics, Taipei