Financial constraints and exports: evidence from Portuguese manufacturing firms
Armando Silva ()
FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto
This paper analyzes the links between financial constraints and firm export behavior, at the firm level, by using data on Portuguese manufacturing enterprises. Theoretical models of Chaney (2005) and Manova (2010) suggest that credit constraints are detrimental for exports but no model explains consistently why exports could improve firms´ financial health. Previous empirical literature has not yet reached a consensus on these subjects and there is a great heterogeneity in measuring financial constraints and how to assess the causality relationships; results are also quite heterogeneous. Developing a very recent trend, we approximate credit constraints by using a financial score built on eight variables; to assess the effects of exports on the financial status of firms we apply, for the first time to these types of studies, a propensity score matching with difference in differences. This procedure is used to deal with the endogeneity problems, stemming from the fact that new exporters have most likely initial better financial health. We find that firms enjoying better financial health are more likely to become exporters and that new exporters show improvements in their financial situation. These findings have important policy implications as they suggest that public intervention to support exports is clearly justified.
Keywords: exports; matching; financial constraints; corporate finances (search for similar items in EconPapers)
Pages: 27 pages
New Economics Papers: this item is included in nep-eec, nep-eff, nep-ent, nep-int and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27) Track citations by RSS feed
Downloads: (external link)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.fep.up.pt/investigacao/workingpapers/11.02.01_wp402.pdf [301 Moved Permanently]--> https://www.fep.up.pt/investigacao/workingpapers/11.02.01_wp402.pdf)
Journal Article: Financial Constraints and Exports: Evidence from Portuguese Manufacturing Firms (2011)
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:por:fepwps:402
Access Statistics for this paper
More papers in FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto Contact information at EDIRC.
Bibliographic data for series maintained by ().