Does Public Financing Support Increase Exports? Evidence from a Quasi-Experiment at the Us Export-Import Bank

This paper estimates the causal effect of public financing support on exports using a large and plausibly exogenous shock to the supply of export financing support due to the shutdown of the U.S. Export-Import (ExIm) Bank in 2015. I utilize this unique quasi-experiment together with the synthetic control method to estimate that the average affected industry experienced a reduction in exports by 2.2%, or 56 cents per dollar of lost support. While these results suggest that support by the ExIm bank can be an effective policy tool to relax financing constraints and promote exports, the observed allocation of financing support across industries is suboptimal if the goal is employment growth as better targeting could create an additional 66,000 export-related jobs per year