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Financial constraints and firm exports: accounting for heterogeneity, self-selection and endogeneity

Author

Listed:
  • Angelo Secchi
  • Federico Tamagni
  • Chiara Tomasi
Abstract
The paper examines the causal effect of financial constraints on firm exports. We exploit a firm-level proxy of constraints based on credit ratings and available for a large panel of Italian exporting and non exporting firms. Our estimation strategy allows to cure for self-selection into exports and endogeneity of financial constraints. At the same time, we can control for unobserved firm fixed effects both in the selection and in the export equation, thus identifying the effect on exports of within firm changes in financial constraints status. We find that financial constraints produce a sizable reduction in the value of firm foreign sales

Suggested Citation

  • Angelo Secchi & Federico Tamagni & Chiara Tomasi, 2014. "Financial constraints and firm exports: accounting for heterogeneity, self-selection and endogeneity," LEM Papers Series 2014/16, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    • Handle: RePEc:ssa:lemwps:2014/16
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Filomena Pietrovito & Alberto Franco Pozzolo, 2021. "Credit constraints and exports of SMEs in emerging and developing countries," Small Business Economics, Springer, vol. 56(1), pages 311-332, January.
    2. Angelo Secchi & Federico Tamagni & Chiara Tomasi, 2014. "The micro patterns of export diversification under financial constraints," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 23(6), pages 1595-1622.
    3. Maria Bas & Ivan Ledezma, 2020. "Trade liberalization and heterogeneous firms’ adjustments: evidence from India," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(2), pages 407-441, May.
    4. Bernini, Michele & Guillou, Sarah & Bellone, Flora, 2015. "Financial leverage and export quality: Evidence from France," Journal of Banking & Finance, Elsevier, vol. 59(C), pages 280-296.
    5. L. Benfratello & A. Bottasso & C. Piccardo, 2022. "R&D and export performance: exploring heterogeneity along the export intensity distribution," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 49(2), pages 189-232, June.
    6. Dhyne, Emmanuel & Berthou, Antoine & Soares, Ana Cristina & Bugamelli, Matteo & Cazacu, Ana-Maria & Lalinsky, Tibor & Meriküll, Jaanika & Harasztosi, Péter & Demian, Calin-Vlad & Oropallo, Filippo, 2015. "Assessing European firms' exports and productivity distributions: the CompNet trade module," Working Paper Series 1788, European Central Bank.
    7. Rossi, Stefania Patrizia Sonia & Bonanno, Graziella & Giansoldati, Marco & Gregori, Tullio, 2021. "Export starters and exiters: Do innovation and finance matter?," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 280-297.
    8. M. Padmaja & Subash Sasidharan, 2021. "Financing constraints and exports: evidence from India," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 45(1), pages 118-145, January.
    9. José Manuel Mansilla-Fernández & Juliette Milgram-Baleix, 2023. "Working capital management, financial constraints and exports: evidence from European and US manufacturers," Empirical Economics, Springer, vol. 64(4), pages 1769-1810, April.
    10. Ketan Reddy & Radeef Chundakkadan & Subash Sasidharan, 2021. "Firm innovation and global value chain participation," Small Business Economics, Springer, vol. 57(4), pages 1995-2015, December.
    11. Anh Tuan Bui & Thu Phuong Pham, 2021. "Financial and Labour Obstacles and Firm Employment: Evidence from Europe and Central Asia Firms," Sustainability, MDPI, vol. 13(15), pages 1-18, August.

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    More about this item

    Keywords

    financial constraints; firm exports; self-selection; endogeneity;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • 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

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