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Financial Constraints and Firm Export Behavior

Author

Listed:
  • Flora Bellone

    () (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique)

  • Patrick Musso

    () (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique)

  • Lionel Nesta

    (OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po)

  • Stefano Schiavo

    (Department of Economics - UNITN - Università degli Studi di Trento)

Abstract

The paper analyzes the link between financial constraints and firm export behavior. Our main finding is that firms enjoying better financial health are more likely to become exporters. The result contrasts with the previous empirical literature which found evidence that export participation improves firm financial health, but not that export starters display any ex-ante financial advantage. On the contrary, we find that financial constraints act as a barrier to export participation. Better access to external financial resources increases the probability to start exporting and also shortens the time before firms decide to serve foreign customers. This finding has important policy implications as it suggests that, in presence of financial markets imperfections, public intervention can be called for to help eficient but financially constrained firms to overcome the sunk entry costs into export markets and expand their activities abroad.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Flora Bellone & Patrick Musso & Lionel Nesta & Stefano Schiavo, 2009. "Financial Constraints and Firm Export Behavior," Post-Print halshs-00721070, HAL.
  • Handle: RePEc:hal:journl:halshs-00721070
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00721070
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    Cited by:

    1. Joze P. Damijan & Crt Kostevc, 2011. "Firms’ Patterns of Trade and Access to Finance," Chapters, in: Ewald Nowotny & Peter Mooslechner & Doris Ritzberger-Grünwald (ed.), Post-Crisis Growth and Integration in Europe, chapter 19, Edward Elgar Publishing.
    2. Ana Rita Marques & Cátia Silva, 2018. "Assessing the Competitiveness of the Portuguese Chemical Sector," GEE Papers 0110, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Sep 2018.
    3. Roa Mónica & Molina Danielken, 2017. "The Effect of Bank Credit and the Trade Patterns of Colombian Exporters," Working Papers 2017-19, Banco de México.

    More about this item

    Keywords

    Productivity; Export; Financial Constraints;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing

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