Chenzi Xu, Stanford

Paper: The Real Effects of Export Credit Subsidies: Evidence from the U.S. EXIM Shutdown

Abstract: We study how export credit subsidies affect firm behavior using the temporary shutdown of the Export–Import Bank of the United States (EXIM) in 2015 as a natural experiment. When EXIM’s 1934 charter expired , leading to an effective shutdown of the agency. We show that exporting firms that previously relied on EXIM support saw a 9% drop in sales after the agency closed down, driven by a reduction in exports. These firms were unable to make up for the loss of subsidized financing EXIM provided and consequently laid off employees and curtailed investment.