Financial Constraints and Exports: Evidence from Portuguese Manufacturing Firms

Abstract

This paper analyses the links between financial constraints and firm export behavior, at the firm level, by using data on Portuguese manufacturing enterprises. Previous empirical literature has not yet reached a consensus on these subjects and there is a great heterogeneity in measuring financial constraints. In line with a very recent trend, we approximate credit constraints by using a financial score built on eight variables. In order 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. We find that new exporters show significant improvements in their financial situation.

Keywords: Exports, Propensity-Score-Matching, Financial constraints

JEL Classification: F10, G32, L25