External credit and export decision: Evidence from Nigeria
Richard Kofi Akoto and
African Development Review, 2020, vol. 32, issue 4, 540-550
This study examines the effect of external credit on the export decision of manufacturing firms in Nigeria using the 2014 World Bank Enterprise Surveys data. The paper employs an instrumental variable (IV) probit model to assess the empirical relations. The results reveal that both bank and nonbank credit positively and significantly drive firms' foreign market entry decision in Nigeria. Policy interventions should therefore be directed at creating an enabling environment that would stimulate an increase in the breadth and depth of financial presence across Nigeria. This may be done through offering special tax reliefs to banks and nonbank financial institutions that seek to expand. Banks should also be encouraged to invest in innovative strategies such as branchless banking and mobile banking which have the capability to increase access without the huge cost outlays for physical infrastructure. They should further be encouraged to develop special ‘export credit packages’ for smaller but viable firms that are willing to go into exporting but lack the necessary collateral, and create special ‘task forces’ to monitor and redeem such loans when they fall due. The Government should also channel ‘export development credit’ through banks and nonbank financial institutions to manufacturing firms in Nigeria for efficient allocation, monitoring and collection.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:afrdev:v:32:y:2020:i:4:p:540-550
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1017-6772
Access Statistics for this article
African Development Review is currently edited by John C. Anyanwu, Hassan Aly and Kupukile Mlambo
More articles in African Development Review from African Development Bank Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().