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Credit constraints and firm exports: Evidence from SMEs in emerging and developing countries

Author

Listed:
  • Filomena Pietrovito

    (University of Molise)

  • Alberto Franco Pozzolo

    (University of Molise and Centro Studi Luca d'Agliano)

Abstract

We study the relationship between credit contraints and export behavior using a large and heterogeneous sample of small and medium size firms from 65 emerging and developing countries between 2003 and 2014. We measure credit contraints by means of each firm's self-assessment of whether it is credit rationed, and we follow an instrumental variable approach that uses firm-level instruments to address the potential endogeneity of credit constraints with respect to export performance. We find robust evidence of a negative, statistically and economically significant effect of financial constraints on both the probability that a firm exports (the extensive margin of exports) and the share of exports over total sales (the intensive margin of exports).

Suggested Citation

  • Filomena Pietrovito & Alberto Franco Pozzolo, 2019. "Credit constraints and firm exports: Evidence from SMEs in emerging and developing countries," Development Working Papers 441, Centro Studi Luca d'Agliano, University of Milano.
    • Handle: RePEc:csl:devewp:441
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    File URL: https://dagliano.unimi.it/wp-content/uploads/2019/01/WP441.pdf
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    Citations

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    Cited by:

    1. Nucci, Francesco & Pietrovito, Filomena & Pozzolo, Alberto Franco, 2023. "Intermediated trade and credit constraints: The case of firm’s imports," International Economics, Elsevier, vol. 175(C), pages 201-220.
    2. Ha, Le Thanh & Thanh, To Trung & Thang, Doan Ngoc & Anh, Pham Thi Hoang, 2021. "Bribery, export decisions, and institutional constraints: Evidence from cross-country firm-level data," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 585-612.
    3. Joachim Wagner, 2019. "Access to Finance and Exports – Comparable Evidence for Small and Medium Enterprises from Industry and Services in 25 European Countries," Open Economies Review, Springer, vol. 30(4), pages 739-757, September.
    4. Francesco Nucci & Filomena Pietrovito & Alberto Franco Pozzolo, 2021. "Imports and credit rationing: A firm‐level investigation," The World Economy, Wiley Blackwell, vol. 44(11), pages 3141-3167, November.
    5. Dai, Mi & Nucci, Francesco & Pozzolo, Alberto F. & Xu, Jianwei, 2021. "Access to finance and the exchange rate elasticity of exports," Journal of International Money and Finance, Elsevier, vol. 115(C).
    6. Trang Hoai Phan & Rainer Stachuletz & Hai Thi Hong Nguyen, 2022. "Export Decision and Credit Constraints under Institution Obstacles," Sustainability, MDPI, vol. 14(9), pages 1-27, May.
    7. Haddoud, Mohamed Yacine & Onjewu, Adah-Kole Emmanuel & Nowiński, Witold & Jones, Paul, 2021. "The determinants of SMEs’ export entry: A systematic review of the literature," Journal of Business Research, Elsevier, vol. 125(C), pages 262-278.

    More about this item

    Keywords

    export decisions; margin of exports; credit contraints; firm level;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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