Working capital management, financial constraints and exports: evidence from European and US manufacturers

José Manuel Mansilla-Fernández () and Juliette Milgram-Baleix ()
Additional contact information
José Manuel Mansilla-Fernández: Public University of Navarre (UPNA)
Juliette Milgram-Baleix: University of Granada
Authors registered in the RePEc Author Service: Juliette Milgram

Empirical Economics, 2023, vol. 64, issue 4, No 10, 1769-1810

Abstract: Abstract This paper investigates the effect of firms’ working capital management, measured by the cash conversion cycle (CCC) on exports, on both the intensive and extensive margins. By using Heckman’s two-stage model for the treatment of sample selection bias, we find that the longer the CCC, the lower firms’ likelihood of exporting and the lower the volume of their exports. This phenomenon is economically more relevant for financially constrained firms than for unconstrained firms. The results are robust to the propensity score matching, the transition sample and the placebo analyses. Finally, these results can be extrapolated in the context of the COVID-19 crisis because of the decline in trading conditions and firms’ shortage of liquidity.

Keywords: Cash conversion cycle; COVID-19 crisis; Exports; Financial constraints; Working capital management (search for similar items in EconPapers)
JEL-codes: G01 G21 G32 H63 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s00181-022-02295-5 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: Working Capital Management, Financial Constraints, and Exports. Evidence from European and US Manufacturers (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:empeco:v:64:y:2023:i:4:d:10.1007_s00181-022-02295-5

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

DOI: 10.1007/s00181-022-02295-5

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().