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Financial constraints, exports and monetary integration - Financial constraints and exports: An analysis of Portuguese firms during the European monetary integration

  • Filipe Silva

    ()

    (Faculdade de Economia, Universidade de Coimbra GEMF–Grupo de Estudos Monetários e Financeiros)

  • Carlos Carreira

    ()

    (Faculdade de Economia, Universidade de Coimbra GEMF–Grupo de Estudos Monetários e Financeiros)

Financial constraints are a key determinant that hinders firms' ability to export. This paper analyses the nexus between these constraints and firms' engagement in international trade, as well as it explores the impact of the European monetary integration process upon firms' financial constraints. Therefore, we estimate cash to cash-flow sensitivities for different periods (1996-2000 and 2001-2004) and different groups of firms, according to their exporting and importing activity. Our results indicate that, depending on their international openness, the European monetary integration seems to have generally helped reducing the degree of financial constraints faced by Portuguese firms. Additionally, our findings suggest that, rather than unconstrained firms self-selecting into exporting, firms' constraints were reduced after they started exporting.

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File URL: http://www.gee.min-economia.pt/RePEc/WorkingPapers/GEE_PAPERS_39.pdf
File Function: First version, 2011
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Paper provided by Gabinete de Estratégia e Estudos, Ministério da Economia e da Inovação in its series GEE Papers with number 0039.

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Length: 28 pages
Date of creation: Jul 2011
Date of revision: Jul 2011
Handle: RePEc:mde:wpaper:0039
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