Finance Research Seminar by Prof. Cláudia Custódio

The distinguished speaker is Prof. Cláudia Custódio who is a Professor of Finance at Imperial College London. Prior to joining Imperial, she was an Assistant Professor of Finance at NOVA School of Business and Economics in Lisbon and at the W. P. Carey School of Business, Arizona State University. Prof. Custódio was awarded her PhD from the London School of Economics.

She is a research associate at the European Corporate Governance Institute (ECGI), a research fellow at the Centre for Economic Policy Research (CEPR), an Executive Committee Director at the European Finance Association (EFA), and Director of the Board (Vice-Chair) at The Global Corporate Governance Colloquia (GCGC).

Prof. Custódio is also an Associate Editor for several Journals: Financial Management, the Journal of Financial Intermediation, and the Journal of Empirical Finance.

Her research focus is corporate finance and her work has been published in top academic journals such as the Journal of Finance, the Journal of Financial Economics, and the Review of Financial Studies.

For this seminar, Prof. Custódio will present a paper titled: ‘Credit Access and Market Access: Evidence from a Portuguese Credit Guarantee Scheme’

Abstract:

We show that credit access is a key barrier to exporting. We analyze a government scheme that provided credit guarantees to Portuguese SMEs. Regression discontinuity estimates, based on program eligibility criteria, indicate that qualifying firms are more likely to export and to expand their export activity. Credit access has persistent effects, disproportionately impacting not-yet exporters and smaller firms. Our results support international trade models in which credit allows firms to overcome sunk entry costs, leading to hysteresis in trade. We propose two sources of these costs — trust-building and quality upgrading — and show that government guarantees promote access to foreign markets.