Heterogeneity and nonlinearity in the relationship between rediscount credits and firm exports

Export credits are used extensively throughout the world to temper the negative effects of financial constraints on exports. In this paper, we focus on a particular form of subsidized export credits, namely, an export rediscount credit program implemented by the Central Bank of the Republic of Türkiye. For this purpose, we create a detailed firm-level data set that matches monthly firm-level export data with credit and financial statement data. Our results show that exports by firms that use rediscount credit increase significantly over a six-month horizon and that the amount of credit and export growth have a positive relation. Moreover, the relation between the credit amount and export volume is not linear; the correlation starts to decline after a certain point. Our results also reveal heterogeneity with respect to size: exports increase more after using rediscount credit for small firms than large firms.