Using firm-level data from the manufacturing sector of Chile for the period 1995-2002, we examine whether access to finance increase the probability of exporting. To do that, we exploit information of firms’ access to banking debt and changes in the real exchange rate (RER) to identify the causal effect of finance on exporting. This is an interesting setting given that the Chilean economy experienced a sustained RER depreciation since 1999, increasing export profitability. We use these changes in RER as a quasi-experiment to study the impact of access to banking finance. Our results show that RER depreciations increase the probability of exporting for firms with access to banking finance and especially for firms in industries with higher financial needs. These results are robust to control for other firm characteristics affecting the probability of exporting and also to time varying industry-specific shocks that may affect export performance and banking finance.
