Financial factors and the margins of trade: evidence from cross-country firm-level data

Nicolas Berman () and Jérôme Héricourt

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: Using a large cross-country, firm level database containing 5,000 firms in 9 developing and emerging economies, we study how financial factors affect both firms' export decisions and the amount exported by firm. First, our results stress an important impact of firms' access to finance on their entry decision into the export market. However, a better financial health neither increases the probability of remaining and exporter once the firm has entered, not the size of exports. Second, we find that financial constraints create a disconnection between firms' productivity and their export status : productivity is a significant determinant of exporting decision only if the firm has a sufficient access to external finance. Finally, an increase in a country's financial development dampens this disconnection, thus acting positively both on the number of exporters and on the exporters' selection process.

Keywords: Export decision; margins of trade; financial constraints. (search for similar items in EconPapers)
JEL-codes: D24 F14 F0 D92 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-int
Date: 2008-09

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Related works:
Working Paper: Financial Factors and the Margins of Trade: Evidence from Cross-Country Firm-Level Data (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:mse:cesdoc:bla08050

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