Financing benefit from exporting: An indirect identification approach

Ziliang Yu and Jiadong Tong

Journal of Multinational Financial Management, 2020, vol. 57-58

Abstract: The signaling effect, sales diversification, and diversification of investment funding sources are three mechanisms through which exporting might alleviate financial constraints on a firm. In proposing an indirect identification strategy with application to Chinese privately owned enterprises (POEs), we first examine whether and how firms obtain such financing benefits from exporting. We find that although exporting can alleviate financial constraints, it does so mainly through the mechanism of sales diversification. This finding implies that Chinese POEs can obtain a financing benefit through exporting by improving cash flow stability but not by improving financing status in either the domestic or foreign capital market.

Keywords: Imperfect capital market; Export behavior; Financial constraint; Private-Owned enterprises; China (search for similar items in EconPapers)
JEL-codes: F19 G14 G32 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:57-58:y:2020:i::s1042444x20300463

DOI: 10.1016/j.mulfin.2020.100657

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