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Financial Constraints, Firms' Supply Chains and Internationalization

Author

Listed:
  • Raoul Minetti
  • Pierluigi Murro
  • Zeno Rotondi
  • Susan Chun Zhu

Abstract

Using a unique sample of small and medium-sized Italian firms, we investigate the effect of financial constraints on firms participation in domestic and international supply chains. We find that firms more exposed to bank credit rationing and with weaker relationships with banks are more likely to participate in supply chains to overcome liquidity shortages. This benefit of supply chains is especially strong when firms forge ties with international trading partners and when they establish long-term relationships with large suppliers. To control for possible endogeneity of firms access to credit, we construct instruments capturing exogenous shocks to the structure of the Italian local banking markets.

Suggested Citation

  • Raoul Minetti & Pierluigi Murro & Zeno Rotondi & Susan Chun Zhu, 2016. "Financial Constraints, Firms' Supply Chains and Internationalization," Note di discussione - MISE Working Papers mise-4, MISE - Ministero dello Sviluppo Economico.
  • Handle: RePEc:sve:wpaper:mise-4
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    File URL: http://workingpaper.mise.gov.it/archive/wp_2_2016.pdf
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Giovanni Ferri & Pierluigi Murro, 2016. "A Credit Crunch Behind the Great Trade Collapse? Micro Evidence From Europe," CERBE Working Papers wpC10, CERBE Center for Relationship Banking and Economics.
    2. Giovanni Ferri & Pierluigi Murro & Valentina Peruzzi & Zeno Rotondi, 2017. "Bank lending technologies and credit availability in Europe. What can we learn from the crisis?," Mo.Fi.R. Working Papers 135, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    3. Giovanni Ferri & Raoul Minetti & Pierluigi Murro, 2018. "Credit Relationships in the Great Trade Collapse. Micro Evidence From Europe," CERBE Working Papers wpC26, CERBE Center for Relationship Banking and Economics.
    4. Pierluigi Murro & Valentina Peruzzi, 2017. "Family firms and access to credit. Is family ownership beneficial?," CERBE Working Papers wpC23, CERBE Center for Relationship Banking and Economics.

    More about this item

    Keywords

    Credit; Global Value Chains; nternationalization;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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