Variable Export Price Elasticities and Credit Constraints: Theory and Evidence from Greek Firms E. Dinopoulos (University of Florida), Sarantis Kalyvitis (AUEB), Margarita Katsimi (AUEB and CESIfo)

VARIABLE EXPORT PRICE ELASTICITIES AND CREDIT CONSTRAINTS: THEORY AND EVIDENCE FROM GREEK FIRMS (download Appendix)

E. Dinopoulos (University of Florida), S. Kalyvitis (AUEB), M. Katsimi (AUEB and CESIfo)

Abstract: We propose a simple model of trade with endogenous quality, non-homothetic preferences and credit constraints. A unique data set of Greek manufacturing firms with firm-level exports, credit scores, and other financial variables, supports the model’s main predictions. Specifically, we establish that less credit-constrained Greek exporters with higher credit scores face export demand curves with lower price elasticity, charge higher-export prices, and export higher-quality products.