Do external commercial borrowings and financial development affect exports?

In this study, we examine the competitiveness effect of currency depreciation in the presence of external commercial borrowing (ECBs) and low financial development. The estimates of autoregressive distributed lag (ARDL) show the contractionary effects of exchange rate depreciation on exports owing t...

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Autores principales:	Ashis Kumar Pradhan, Gourishankar S Hiremath
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2020
Materias:	external commercial borrowing financial development currency depreciation competitiveness effect credit constraints ardl cointegration Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/71c4fb49a37d4414852fc9ca20acae20
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spelling	oai:doaj.org-article:71c4fb49a37d4414852fc9ca20acae202021-12-02T17:00:23ZDo external commercial borrowings and financial development affect exports?2331-197510.1080/23311975.2020.1796269https://doaj.org/article/71c4fb49a37d4414852fc9ca20acae202020-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2020.1796269https://doaj.org/toc/2331-1975In this study, we examine the competitiveness effect of currency depreciation in the presence of external commercial borrowing (ECBs) and low financial development. The estimates of autoregressive distributed lag (ARDL) show the contractionary effects of exchange rate depreciation on exports owing to increased liability denominated in foreign currency such as ECBs. We also find a positive relationship between bank credit and exports, but the marginal benefits of domestic credit diminish when the exchange rate depreciates. The findings of the study suggest that natural hedging does not act as a cushion against shocks and thus calls for the mandatory use of derivatives by firms. The development of domestic credit markets is essential to reap the benefits of currency depriciation in the export sector.Ashis Kumar PradhanGourishankar S HiremathTaylor & Francis Grouparticleexternal commercial borrowingfinancial developmentcurrency depreciationcompetitiveness effectcredit constraintsardl cointegrationBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 7, Iss 1 (2020)
institution	DOAJ
collection	DOAJ
language	EN
topic	external commercial borrowing financial development currency depreciation competitiveness effect credit constraints ardl cointegration Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	external commercial borrowing financial development currency depreciation competitiveness effect credit constraints ardl cointegration Business HF5001-6182 Management. Industrial management HD28-70 Ashis Kumar Pradhan Gourishankar S Hiremath Do external commercial borrowings and financial development affect exports?
description	In this study, we examine the competitiveness effect of currency depreciation in the presence of external commercial borrowing (ECBs) and low financial development. The estimates of autoregressive distributed lag (ARDL) show the contractionary effects of exchange rate depreciation on exports owing to increased liability denominated in foreign currency such as ECBs. We also find a positive relationship between bank credit and exports, but the marginal benefits of domestic credit diminish when the exchange rate depreciates. The findings of the study suggest that natural hedging does not act as a cushion against shocks and thus calls for the mandatory use of derivatives by firms. The development of domestic credit markets is essential to reap the benefits of currency depriciation in the export sector.
format	article
author	Ashis Kumar Pradhan Gourishankar S Hiremath
author_facet	Ashis Kumar Pradhan Gourishankar S Hiremath
author_sort	Ashis Kumar Pradhan
title	Do external commercial borrowings and financial development affect exports?
title_short	Do external commercial borrowings and financial development affect exports?
title_full	Do external commercial borrowings and financial development affect exports?
title_fullStr	Do external commercial borrowings and financial development affect exports?
title_full_unstemmed	Do external commercial borrowings and financial development affect exports?
title_sort	do external commercial borrowings and financial development affect exports?
publisher	Taylor & Francis Group
publishDate	2020
url	https://doaj.org/article/71c4fb49a37d4414852fc9ca20acae20
work_keys_str_mv	AT ashiskumarpradhan doexternalcommercialborrowingsandfinancialdevelopmentaffectexports AT gourishankarshiremath doexternalcommercialborrowingsandfinancialdevelopmentaffectexports
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Do external commercial borrowings and financial development affect exports?

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