{"title":"Do subsidized export credits affect firms’ behavior in the FX market? Micro evidence from Türkiye","authors":"Ünal Seven, Ertan Tok","doi":"10.1016/j.bir.2024.06.004","DOIUrl":null,"url":null,"abstract":"<div><div>Through its export-led growth strategy, Türkiye intends to increase its exports by subsidizing exporters via a rediscount credit scheme, a form of subsidized export credit, that is mostly financed by the Central Bank of the Republic of Türkiye (CBRT). This paper aims to investigate whether benefiting from such cost-effective financial support causes unintended consequences by focusing on the foreign exchange purchases of treated firms. Using firm-level data and a propensity score matching (PSM) difference-in-differences (DD) estimator, we find evidence of a positive and significant impact of using rediscount credits on the net FX purchases of treated firms. Furthermore, we find that being a net importer increases the sensitivity of net FX purchases to the use of rediscount credit. We also show that the impact of using rediscount credits on net FX purchases is higher in SMEs than in large firms.</div></div>","PeriodicalId":46690,"journal":{"name":"Borsa Istanbul Review","volume":"24 6","pages":"Pages 1077-1087"},"PeriodicalIF":6.3000,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Borsa Istanbul Review","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S2214845024000954","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
Through its export-led growth strategy, Türkiye intends to increase its exports by subsidizing exporters via a rediscount credit scheme, a form of subsidized export credit, that is mostly financed by the Central Bank of the Republic of Türkiye (CBRT). This paper aims to investigate whether benefiting from such cost-effective financial support causes unintended consequences by focusing on the foreign exchange purchases of treated firms. Using firm-level data and a propensity score matching (PSM) difference-in-differences (DD) estimator, we find evidence of a positive and significant impact of using rediscount credits on the net FX purchases of treated firms. Furthermore, we find that being a net importer increases the sensitivity of net FX purchases to the use of rediscount credit. We also show that the impact of using rediscount credits on net FX purchases is higher in SMEs than in large firms.
期刊介绍：
Peer Review under the responsibility of Borsa İstanbul Anonim Sirketi. Borsa İstanbul Review provides a scholarly platform for empirical financial studies including but not limited to financial markets and institutions, financial economics, investor behavior, financial centers and market structures, corporate finance, recent economic and financial trends. Micro and macro data applications and comparative studies are welcome. Country coverage includes advanced, emerging and developing economies. In particular, we would like to publish empirical papers with significant policy implications and encourage submissions in the following areas: Research Topics: • Investments and Portfolio Management • Behavioral Finance • Financial Markets and Institutions • Market Microstructure • Islamic Finance • Financial Risk Management • Valuation • Capital Markets Governance • Financial Regulations
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