Cash-in-advance, export decision and financial constraints: Evidence from cross-country firm-level data

Thang Doan, Thi Kim Chi Vu, Thi Cam Thuy Nguyen, Thi Hong Hai Nguyen and Kieu Trang Nguyen

International Review of Economics & Finance, 2020, vol. 69, issue C, 75-92

Abstract: This paper investigates the relationship between Cash In Advance (CIA) and firms’ export participation, particularly in the presence of financial constraints. Using the firm-level data covering 56 countries for the period from 2006 to 2010, we detect the positive correlation of the employment of CIA and the export participation of small and medium-sized firms only. This correlation becomes more prominent for severely credit-constrained firms. One possible explanation is that CIA raises the export possibility of small and medium-sized firms by ameliorating credit constraints while it plays no role in large-sized ones.

Keywords: Cash in advance; Export decision; Financial constraint; Trade credit; SMEs (search for similar items in EconPapers)
JEL-codes: F10 F3 G31 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 (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:69:y:2020:i:c:p:75-92

DOI: 10.1016/j.iref.2020.04.013

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