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The impact of exporting on SME capital structure and debt maturity choices

Author

Listed:
  • Elisabeth Maes

    () (KULeuven, Faculty of Economics and Business, Department of Accountancy, Finance and Insurance)

  • Nico Dewaelheyns

    () (KULeuven, Faculty of Economics and Business, Department of Accountancy, Department of Financial Management)

  • Catherine Fuss

    () (Economics and Research Department, National Bank of Belgium)

  • Cynthia Van Hulle

    () (KULeuven, Faculty of Economics and Business, Department of Accountancy, Finance and Insurance)

Abstract

Using a longitudinal dataset comprising of detailed financial and exporting data from Belgian small and medium-sized enterprises (SME) between 1998 and 2013, this article examines the manner in which firms manage to finance their export activities and the resulting impact on corporate capital structure. We find that exporters have to finance relatively more working capital as compared to their non-exporting peers and that they resolve this financing need by carrying more short-term debt. In addition, we evidence that the relationship between pledgeable short-term assets, such as working capital, and short-term debt financing is more pronounced for exporters. In particular, we show that the ties between pledgeable short-term assets and short-term debt financing are stronger for export-intensive firms and firms that serve distant and risky export destinations. Overall, what our empirical findings seem to suggest is that developing tools that facilitate the pledging of assets is likely to boost SME export activities by widening access to bank financing and reducing financial constraints.

Suggested Citation

  • Elisabeth Maes & Nico Dewaelheyns & Catherine Fuss & Cynthia Van Hulle, 2016. "The impact of exporting on SME capital structure and debt maturity choices," Working Paper Research 311, National Bank of Belgium.
  • Handle: RePEc:nbb:reswpp:201610-311
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    File URL: https://www.nbb.be/doc/oc/repec/reswpp/wp311en.pdf
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    More about this item

    Keywords

    SMEs; capital structure; debt maturity; export; collateral; working capital;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • G3 - Financial Economics - - Corporate Finance and Governance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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