In Financial structures, banking regulations,
and export dynamics, Raoul Minetti and co-authors provide fresh evidence on the role of financial systems in countries’ export structures and contribute to the debate on bank- vs. market-based financial systems. Combining data on the structure of
financial systems with data on the number and export sales of exporting firms and on exporters’ entry, exit and turnover rates on the 2-digit ISIC industry level for a large number of countries, the authors find that banks can promote the number of exporters
more than decentralized financial markets. However, bank- oriented financial systems tend to reduce the dynamism of the export sector by slowing down the entry and exit of exporters. There is also evidence that it is especially domestic banks that slow down
exporters’ turnover, while no such evidence emerges for foreign banks. Combining their data with another database, the Bank Regulation and Supervision database, they also show that in countries with lax bank regulation domestic banks tend to protect
incumbent exporters, resulting in a higher concentration in the export sector.