Do bank-firm relationships influence firm internationalization?
AbstractWe show that a longer relationship length with the main bank fosters Italian firms' foreign direct investment (FDI) and, weakly, production off-shoring abroad. Possibly, longer bank relationships help secure external financing for these companies, which have become more opaque because of their internationalization. In contrast, other than for smaller-sized companies, we detect no impact on firms' propensity to export, suggesting that exporting alters enterprises' financial set-up less than shifting production internationally. We also find a link between the internationalization of the main creditor bank and firm FDIs. Our evidence suggests that reexisting strong bank-firm relationships support manufacturing firms' production internationalization.
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Bibliographic InfoPaper provided by Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences in its series Mo.Fi.R. Working Papers with number 37.
Date of creation: Apr 2010
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More information through EDIRC
bank-firm relationships; export; external finance; foreign direct investments; internationalization; off-shoring;
Find related papers by JEL classification:
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- F10 - International Economics - - Trade - - - General
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-05-08 (All new papers)
- NEP-BAN-2010-05-08 (Banking)
- NEP-BEC-2010-05-08 (Business Economics)
- NEP-CSE-2010-05-08 (Economics of Strategic Management)
- NEP-EFF-2010-05-08 (Efficiency & Productivity)
- NEP-IFN-2010-05-08 (International Finance)
- NEP-INT-2010-05-08 (International Trade)
- NEP-SBM-2010-05-08 (Small Business Management)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Nakhoda, Aadil, 2012. "The influence of financial leverage of firms on their international trading activities," MPRA Paper 35765, University Library of Munich, Germany.
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