Empirical Analysis of Factors Affecting the Choice of Bank for Firm Exports

This article examines whether firms choosing foreign banks for export have higher export intensity than firms operating with non-foreign banks, keeping other factors constant. Under the term export intensity, the authors define the ratio of the value of export to the company's revenue in the reporting year. The hypothesis of the paper is based on the fact that the transfer of knowledge about foreign market from banks to firms helps to reduce sunk costs and information barriers, and thus leads to an increase in the company's export. There is a limited number of empirical studies on the relationship of firms and banks. Most of the works focus on the financial aspects of relationships between banks and companies, for example, one of the papers examines the impact of banks on the financial constraints of firms (Guariglia, 2008). In this article, the authors use a different approach and methodology in comparison with those already studied: the question is whether the choice of foreign banks really increases the intensity of company’s export. As a method of evaluation, the authors use probit regression, as well as the method of instrumental variables (IV). Information about companies is collected from the database of the Federal Customs of Russia and RUSLANA database. Data on banks is collected from the RUSLANA database and Spark-Interfax database. Increasing the intensity of exports can be effective for firms, since it leads to the expansion of exports at lower costs, comparing to entering new markets, therefore, supporting the relationships of the exporter-foreign bank can be valuable for the industrial policy of countries. The authors expect that the foreign status of the company's bank has a positive impact on the intensity of the company's exports in both cases: in the case of exports to neighboring countries, and in the case of exports to foreign countries, other things being equal.