Financial constraints on export market exit of domestic firms versus foreign multinational corporation subsidiaries in South Korea

Minjung Kim ()

Applied Economics Letters, 2019, vol. 26, issue 9, 750-754

Abstract: Using a Korean manufacturing firm-level data set covering a range of years from 2006 to 2013, this study investigates how the financial condition of firms, such as liquidity, leverage, and cash flow ratio, affects exit from export markets. It also analyses whether the financial status of foreign multinational corporation (MNC) subsidiaries differs from that of domestic firms with respect to the hazard of export market exit, especially during a global financial crisis. The empirical results confirm that, for domestic firms, the hazard of export market exit is affected by the firms’ financial condition only during a financial crisis. In other words, the financial vulnerability of domestic firms increases during the crisis, resulting in the hazard of export market exit. However, financial situations for foreign MNC subsidiaries do not affect exits from export markets, indicating a ‘finance-factor comparative advantage’.

Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/13504851.2018.1494799 (text/html)
Access to full text is restricted to subscribers.

Related works:
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:taf:apeclt:v:26:y:2019:i:9:p:750-754

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEL20

DOI: 10.1080/13504851.2018.1494799

Access Statistics for this article

Applied Economics Letters is currently edited by Anita Phillips

More articles in Applied Economics Letters from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().