Exporting and capital investment: On the strategic behavior of exporters
By exporting, firms sell in markets whose business cycles are not perfectly correlated, and so can be expected to have more stable cash flows. If companies are liquidity constrained, this stability of cash flows can provide exporters with certain advantages over firms that operate solely in a domestic market. For instance, under the existence of liquidity constraints, more stable cash flows should foster more stable capital investments. Moreover, the expectation of more stable future cash flows and the information signal from commencing exporting can lessen the severity of liquidity constraints for exporters compared to non-exporters. We test these arguments by examining a stratified representative sample of the Spanish manufacturing sector from 1990 to 1998. Our results suggest that exporters' cash flows and capital investments are more stable than non-exporters'. Moreover, we find that liquidity constraints are less binding for exporters than for non-exporters. The richness of our data allows us to examine alternative explanations for the results we present. We conclude by discussing the strategic implications of our findings for firms.
|Date of creation:||29 Sep 2002|
|Date of revision:|
|Contact details of provider:|| Postal: IESE Business School, Av Pearson 21, 08034 Barcelona, SPAIN|
Web page: http://www.iese.edu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hayashi, Fumio, 1982.
"Tobin's Marginal q and Average q: A Neoclassical Interpretation,"
Econometric Society, vol. 50(1), pages 213-24, January.
- Fumio Hayashi, 1981. "Tobin's Marginal q and Average a : A Neoclassical Interpretation," Discussion Papers 457, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Hirsch, Seev & Lev, Baruch, 1971. "Sales Stabilization Through Export Diversification," The Review of Economics and Statistics, MIT Press, vol. 53(3), pages 270-77, August.
- Simon Gilchrist & Charles P. Himmelberg, 1993.
"Evidence on the role of cash flow for investment,"
Finance and Economics Discussion Series
93-7, Board of Governors of the Federal Reserve System (U.S.).
- Gilchrist, S. & Himmelberg, C.P., 1995. "Evidence on the Role of Cash Flow for Investment," Papers 95-29, Columbia - Graduate School of Business.
- Simon Gilchrist & Charles P. Himmelberg, 1995. "Evidence on the Role of Cash Flow for Investment," Working Papers 95-01, New York University, Leonard N. Stern School of Business, Department of Economics.
- Bernard, A., 1997.
"Exceptional Exporter Performance: Cause, Effect, or Both?,"
97-21, Massachusetts Institute of Technology (MIT), Department of Economics.
- Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
- Andrew B. Bernard & J. Bradford Jensen, 1997. "Exceptional Exporter Performance: Cause, Effect, or Both?," NBER Working Papers 6272, National Bureau of Economic Research, Inc.
- Richard Baldwin, 1988.
"Hysteresis In Import Prices: The Beachhead Effect,"
NBER Working Papers
2545, National Bureau of Economic Research, Inc.
- Steven M. Fazzari & R. Glenn Hubbard & BRUCE C. PETERSEN, 1988.
"Financing Constraints and Corporate Investment,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 19(1), pages 141-206.
- Sofronis K. Clerides & Saul Lach & James R. Tybout, 1998.
"Is Learning by Exporting Important? Micro-Dynamic Evidence from Colombia, Mexico, and Morocco,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 113(3), pages 903-947.
- Sofronis Clerides & Saul Lach & James Tybout, 1996. "Is "learning-by-exporting" important? Micro-dynamic evidence from Colombia, Mexico and Morocco," Finance and Economics Discussion Series 96-30, Board of Governors of the Federal Reserve System (U.S.).
- Sofronis Clerides & Saul Lach & James Tybout, 1996. "Is "Learning-by-Exporting" Important? Micro-Dynamic Evidence from Colombia, Mexico and Morocco," NBER Working Papers 5715, National Bureau of Economic Research, Inc.
- Bee Yan Aw & Xiaomin Chen & Mark J. Roberts, 1997. "Firm-level Evidence on Productivity Differentials, Turnover, and Exports in Taiwanese Manufacturing," NBER Working Papers 6235, National Bureau of Economic Research, Inc.
- Jonathan L Calof, 1994. "The Relationship Between Firm Size and Export Behavior Revisited," Journal of International Business Studies, Palgrave Macmillan, vol. 25(2), pages 367-387, June.
When requesting a correction, please mention this item's handle: RePEc:ebg:iesewp:d-0469. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Noelia Romero)
If references are entirely missing, you can add them using this form.