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Exporting under Financial Constraints: Margins, Switching Dynamics and Prices

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Author Info

  • Angelo Secchi

    (Paris School of Economics – University of Paris 1 and and LEM, Scuola Superiore Sant\'Anna)

  • Federico Tamagni

    (Institute of Economics and LEM, Scuola Superiore Sant’Anna)

  • Chiara Tomasi

    (University of Trento and LEM, Scuola Superiore Sant’Anna)

Abstract

Using data on cross border transactions together with an informative measure of financing constraints this paper provides new evidence that limited access to external capital narrows the scale of foreign sales, the exporters’ product scope and the number of trade partners. It shows that constrained firms have a reduced probability of adding and a higher probability of dropping products and destinations. Further it documents that constrained firms sell their products at higher prices as compared to unconstrained firms. All the results are robust to specific control for unobserved heterogeneity, self-selection into export and potential endogeneity of the financial constraints proxy.

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File URL: http://www.dagliano.unimi.it//media/WP2012_338.pdf
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Bibliographic Info

Paper provided by Centro Studi Luca d\'Agliano, University of Milano in its series Development Working Papers with number 338.

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Length: 31
Date of creation: 16 Jul 2012
Date of revision: 16 Jul 2012
Handle: RePEc:csl:devewp:338

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Keywords: Financial Constraints; Margins of Export; Export Prices;

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References

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Cited by:
  1. Joachim Wagner, 2012. "Credit constraints and exports: Evidence for German manufacturing enterprises," Working Paper Series in Economics, University of Lüneburg, Institute of Economics 251, University of Lüneburg, Institute of Economics.

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