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Financial Constraints as a Barrier to Export Participation

  • Flora Bellone

    (Groupe de Recherche en Droit, Economie et Gestion)

  • Patrick Musso

    (Groupe de Recherche en Droit, Economie et Gestion)

  • Lionel Nesta


  • Stefano Schiavo

    (Department of Economic Geography)

The paper analyzes the link between financial constraints and firms' export decisions, using a large micro-level data set on French Manufacturing firms over the 1996-2004 period. Our main finding is that firms enjoying better ex-ante financial heath are more likely to start exporting. This results contrasts with the previous empirical literature which found evidence that participation to exports market improves a firm financial health but not that export starters display specific ex-ante financial advantages. By contrast, our result supports the view that financial constraints act as a barrier to export participation. This finding has important policy implications as it suggests that, in presence of financial markets imperfections, public intervention can be called for to help efficient but financially constrained firms to overcome the sunk entry costs into export markets and expand their activities abroad.

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Paper provided by Sciences Po in its series Sciences Po publications with number info:hdl:2441/9797.

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Date of creation: 13 Sep 2008
Date of revision:
Publication status: Published in European Trade Study Group Tenth Annual Conference, Warsaw, 11-13 September 2008, pp.1-33
Handle: RePEc:spo:wpmain:info:hdl:2441/9797
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  4. Flora Bellone & Patrick Musso & Lionel Nesta & Michel Quéré, 2007. "The U-Shaped Productivity Dynamics of French Exporters," Working Papers hal-00973046, HAL.
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