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Trade and Access to Finance of SMEs: is There a Nexus?

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Listed:
  • Hala El-Said

    ()

  • Mahmoud Al-Said
  • Chahir Zaki

    () (Cairo University)

Abstract

Limited resources and barriers to entry are critically higher for small and medium enterprises (SMEs) than for large companies. One of the reasons explaining why the resources of SMEs are scarce is their limited access to financial services. This, in turn, reduces their likelihood of exporting. With this in mind, using the census of SMEs done by the Central Bank of Egypt and the Egyptian Banking Institute (EBI), we try to examine the impact of access to finance on SMEs’ export performance. We measure the latter by the extensive margin that means the probability of becoming an exporter and the probability of serving several markets. We found a significant and positive impact on the probability of exporting and that of exporting to more than one destination from dealing with banks and having banking facilities. Thus, wider and more efficient financial services are likely to increase the number of exporters and boost exports diversification.

Suggested Citation

  • Hala El-Said & Mahmoud Al-Said & Chahir Zaki, 2015. "Trade and Access to Finance of SMEs: is There a Nexus?," Working Papers 903, Economic Research Forum, revised Apr 2015.
  • Handle: RePEc:erg:wpaper:903
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    References listed on IDEAS

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    11. Fatma El-Hamidi, 2011. "How Do Women Entrepreneurs Perform? Empirical Evidence from Egypt," Working Papers 23, AlmaLaurea Inter-University Consortium.
    12. Hala El-Said & Mahmoud Al-Said & Chahir Zaki, 2013. "Access to finance and financial problems of SMEs: evidence from Egypt," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 20(3), pages 286-309.
    13. Lucas Figal Garone & Alessandro Maffioli & Cesar M. Rodriguez & Gonzalo Vázquez & João Alberto De Negri, 2012. "Assessing the Impact of Cluster Policies: the case of the Arranjos Productivos Locais in Brazil," SPD Working Papers 1203, Inter-American Development Bank, Office of Strategic Planning and Development Effectiveness (SPD).
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