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Exporting under Financial Constraints: Margins, Switching Dynamics and Prices

  • 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)

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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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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  16. Harrigan, James & Ma, Xiangjun & Shlychkov, Victor, 2015. "Export prices of U.S. firms," Journal of International Economics, Elsevier, vol. 97(1), pages 100-111.
  17. Magnus Lundin & Nils Gottfries & Charlotte Bucht & Tomas Lindström, 2009. "Price and Investment Dynamics: Theory and Plant-Level Data," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(5), pages 907-934, 08.
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