Financial dependence and exports: Entrants or incumbents?

Using firm‐level customs data from 51 countries at different levels of development, we explore differential impacts of access to finance on incumbent and new exporters. Consistent with the literature, firms in sectors more dependent on external finance have higher exports based in financially more d...

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Bibliographic Details
Published in:Southern economic journal 2023-04, Vol.89 (4), p.1102-1137
Main Author: Lee, Kwan Yong
Format: Article
Language:English
Subjects:
Access
Developed countries
entrants
Exports
external finance dependence
Finance
financial development
Incumbency
incumbents
margins of exports
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Summary:Using firm‐level customs data from 51 countries at different levels of development, we explore differential impacts of access to finance on incumbent and new exporters. Consistent with the literature, firms in sectors more dependent on external finance have higher exports based in financially more developed countries. This effect, however, occurs entirely through entrants, with no effect found for incumbents. The trade response of entrants works primarily through the extensive margin (number of exporters) rather than the intensive margin (average size). We further find access to external finance affects exporter entry rates while it does not affect exporter exit rates.
ISSN:0038-4038
2325-8012
DOI:10.1002/soej.12624