Exporting, Capital Investment and Financial Constraints
AbstractMany firms cite financial constraints as some of the most important impediments to their investment and growth. Using a unique data set from the Czech Republic this paper investigates the importance of financing constraints in the context of exporters. It finds that exporters are less financially constrained than non-exporters. However, after carefully correcting for possible endogeneity and selection issues, the evidence points to less constrained firms self-selecting into exporting rather than exporting alleviating firms' financial constraints. The analysis suggests that easing firms' credit constraints may play an important role in facilitating exporting and that welldeveloped financial markets that would decrease firms' cost of external finance may be needed in order to benefit from selling in foreign markets.
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Bibliographic InfoPaper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 25209.
Date of creation: 2009
Date of revision:
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exporting; cash flow; financial constraints;
Other versions of this item:
- Manole, Vlad & Spatareanu, Mariana, 2010. "Exporting, capital investment and financial constraints," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/283010, Katholieke Universiteit Leuven.
- Vlad Manole & Mariana Spatareanu, 2009. "Exporting, Capital Investment and Financial Constraints," Working Papers Rutgers University, Newark 2009-005, Department of Economics, Rutgers University, Newark.
- 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
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-23 (All new papers)
- NEP-CFN-2010-01-23 (Corporate Finance)
- NEP-TRA-2010-01-23 (Transition Economics)
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