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Exporting under Financial Constraints: Margins, Switching Dynamics and Prices

Author

Listed:
  • 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.

Suggested Citation

  • Angelo Secchi & Federico Tamagni & Chiara Tomasi, 2012. "Exporting under Financial Constraints: Margins, Switching Dynamics and Prices," Development Working Papers 338, Centro Studi Luca d'Agliano, University of Milano, revised 16 Jul 2012.
    • Handle: RePEc:csl:devewp:338
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    File URL: https://www.dagliano.unimi.it//media/WP2012_338.pdf
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    References listed on IDEAS

    as
    1. Gottfries, Nils, 1999. "Markets Shares, Financial Constraints, and Pricing Behavior in the Export Market," Working Paper Series 1999:15, Uppsala University, Department of Economics.
    2. de Sousa, José & Mayer, Thierry & Zignago, Soledad, 2012. "Market access in global and regional trade," Regional Science and Urban Economics, Elsevier, vol. 42(6), pages 1037-1052.
    3. Philippe Askenazy & Aida Caldera & Guillaume Gaulier & Delphine Irac, 2015. "Financial constraints and foreign market entries or exits: firm-level evidence from France," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(2), pages 231-253, May.
    4. Andrew B. Bernard & Marco Grazzi & Chiara Tomasi, 2010. "Intermediaries in International Trade: direct versus indirect modes of export," LEM Papers Series 2010/19, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    5. Giulio Bottazzi & Marco Grazzi & Angelo Secchi & Federico Tamagni, 2011. "Financial and economic determinants of firm default," Journal of Evolutionary Economics, Springer, vol. 21(3), pages 373-406, August.
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    Citations

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    Cited by:

    1. Jože Damijan & Črt Kostevc & Sašo Polanec, 2015. "Access to finance, exporting and a non-monotonic firm expansion," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(1), pages 131-155, February.
    2. Joachim Wagner, 2014. "Credit constraints and exports: evidence for German manufacturing enterprises," Applied Economics, Taylor & Francis Journals, vol. 46(3), pages 294-302, January.
    3. Bastos, Paulo & Silva, Joana, 2010. "The quality of a firm's exports: Where you export to matters," Journal of International Economics, Elsevier, vol. 82(2), pages 99-111, November.
    4. Buono, Ines & Formai, Sara, 2018. "The heterogeneous response of domestic sales and exports to bank credit shocks," Journal of International Economics, Elsevier, vol. 113(C), pages 55-73.
    5. Joachim Wagner, 2016. "A survey of empirical studies using transaction level data on exports and imports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(1), pages 215-225, February.
    6. Werner Hölzl & Andreas Reinstaller, 2013. "Finanzierungsbeschränkungen junger technologieorientierter Unternehmen. Ergebnisse einer Unternehmensbefragung," WIFO Monatsberichte (monthly reports), WIFO, vol. 86(8), pages 649-662, August.

    More about this item

    Keywords

    Financial Constraints; Margins of Export; Export Prices;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F30 - International Economics - - International Finance - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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