Financing constraints and exports: evidence from India
M. Padmaja () and
Subash Sasidharan ()
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M. Padmaja: National Institute of Technology
Subash Sasidharan: Indian Institute of Technology
Journal of Economics and Finance, 2021, vol. 45, issue 1, No 6, 118-145
Abstract This paper investigates the effect of financing constraints on the extensive and intensive margins of exports using a rich firm-level data on Indian manufacturing firms. Following the literature, we adopt liquidity ratio and leverage ratio as the measures of financing constraints and control for other firm-level factors. Controlling for initial conditions, endogeneity, and selection bias, we find that financing constraints have a significant impact on the extensive margin of exports. Using Propensity Score Matching –Differences in Differences approach, we find significant post-entry effects of exports on firm financial performance.
Keywords: Financing constraints; Exports; Firm heterogeneity; F10; G11; F14; D21; F36 (search for similar items in EconPapers)
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