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Innovation and export in SMEs: the role of relationship banking

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Listed:
  • Serena Frazzoni
  • Maria Luisa Mancusi

    () (Università Cattolica del Sacro Cuore
    Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore)

  • Zeno Rotondi
  • Maurizio Sobrero
  • Andrea Vezzulli

Abstract

This paper assesses the role of relationship lending in explaining simultaneously the innovation activity of Small and Medium Enterprises (SME), their probability to export (i.e. the extensive margin) and their share of exports on total sales conditional on exporting (i.e. the intensive margin). We adopt a measure of informational tightness based on the ratio of firm’s debt with its main bank to firm’s total assets. Our results show that the strength of the bank-firm relation has a positive impact on both SME’s probability to export and their export margins. This positive effect is only marginally mediated by the SME’s increased propensity to introduce product innovation. We further discuss the financial and non-financial channels through which the intensity of bank-firm relationship supports SMEs’ international activities.

Suggested Citation

  • Serena Frazzoni & Maria Luisa Mancusi & Zeno Rotondi & Maurizio Sobrero & Andrea Vezzulli, 2014. "Innovation and export in SMEs: the role of relationship banking," DISCE - Working Papers del Dipartimento di Economia e Finanza def018, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  • Handle: RePEc:ctc:serie1:def018
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    2. Rosario Crinò & Laura Ogliari, 2015. "Financial Frictions, Product Quality, and International Trade," DISCE - Working Papers del Dipartimento di Economia e Finanza def030, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
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    More about this item

    Keywords

    margins of export; bank-firm relationships; innovation; localized knowledge spillovers;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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