Financial Constraints and Export Participation of SMEs in Post-Communist Countries

Ramiz Rahmanov

Acta Oeconomica, 2019, vol. 69, issue 2, 289-319

Abstract: This paper examines the impact of medium- and short-term financial constraints on the probability of export participation of SMEs in 28 post-communist countries. The regression analysis conducted over the cross-sectional sample of SMEs taken from the BEEPS III-IV-V shows that the mediumand short-term financial constraints produce a significantly negative effect on the probability of exporting. Although there exist arguments for why the effects of medium- and short-term financial constraints can differ from each other, both the medium- and short-term financial constraints appear to reduce the probability of exporting equally by 25%. The regression results also suggest that more productive, innovative, and larger SMEs, and also SMEs with international quality certificates are more likely to export. When the regressions are separately estimated for the first-time and continuous exporters, it appears that only the probability of exporting of continuous exporters is significantly sensitive to the financial constraints. Furthermore, the regressions separately run for the direct and indirect exporters show that the financial constraints have a larger effect on the probability of exporting of indirect exporters. The heterogeneity analysis shows that there is a significant heterogeneity in the effects of medium- and short-term financial constraints on the likelihood of exporting across regions, industries, periods, and firm types.

Keywords: financial constraints; exports; export participation; SMEs; post-communist countries (search for similar items in EconPapers)
JEL-codes: F10 G20 (search for similar items in EconPapers)
Date: 2019
Note: I would like to thank two anonymous referees for comments and suggestions which helped me improve the paper. Furthermore, I would like to thank Sergey Stepanov and Irina Ivashkovskaya (National Research University Higher School of Economics, HSE), and other participants of the session on “Financial conditions for business development” of XVIII International Academic Conference on Economic and Social Development (Moscow) for useful comments and recommendations.
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