Does Easing Financing Matter for Firm Performance?

Udichibarna Bose, Sushanta Mallick () and Serafeim Tsoukas

Essex Finance Centre Working Papers from University of Essex, Essex Business School

Abstract: Financial reforms have been found to be highly important in promoting aggregate productivity. Yet, the linkage between access to finance, firm-level productivity, and exporting performance has been overlooked in the literature. We fill this gap using a rich dataset of 11,612 Indian firms over the period 1988-2014 to study the impact of a unique financial policy intervention on firm performance. We document a significant effect of capital-account liberalization through the lens of an export-oriented policy initiative on firms’ productivity and consequently on their exporting activity. Finally, the beneficial effect of the policy change is more pronounced for financially vulnerable firms, as measured by high debt dependence and low levels of liquidity.

Keywords: Productivity; Exporting; Financing; FX market liberalization (search for similar items in EconPapers)
Date: 2019-11-08
New Economics Papers: this item is included in nep-bec, nep-eff, nep-fdg and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:esy:uefcwp:27830

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