Credit Relationships in the Great Trade Collapse. Micro Evidence From Europe

Using a rich sample of small and medium-sized European firms, we study how banks' lending technologies affected firms' export activities during the 2009 great trade collapse. We find that bank-firm relationships mitigated the contraction of firms' export by easing banks' access to inside, "soft" information on export prospects. However, relationship banks with strong past experience on firms' domestic activities were less inclined to protect exporters. Bank-firm relationships appear to be a buffer especially for young and small exporters and for exporters at an early stage of internationalization