Does Access to Finance Facilitates the Firm's Ability to Export? Experience from Asia-Pacific Countries

Durairaj Kumarasamy and Prakash Singh, Does Access to Finance Facilitates the Firm’s Ability to Export? Experience from Asia-Pacific Countries ARTNeT Working Paper Series No. 159, 2016, Bangkok, ESCAP.

Posted: 4 Nov 2016

See all articles by Durairaj Kumarasamy

Durairaj Kumarasamy

Consultant, ASEAN India Centre, Research and Information System for Developing Countries

Prakash Singh

Goa Institute of Management

Date Written: September 2, 2016

Abstract

Financial development plays an important role in the structure of the trade balance and promoting economic development. Trade literature suggests that differences in economies’ endowments of labour, land, physical capital and technology explain the dynamics and patterns of international trade flows. More recent literature argues that it is the heterogeneity in productivity of firms which mainly accounts for the decision and survival in the international markets. Given the growing importance of Global Value Chains and Regional Production Networks in the emerging economies, financial development is essential to support credit facilities for the traders and provide hassle free transactions. In this context, this study attempts to examine the impact of access to finance on firms’ export decisions in the Asia-Pacific countries. In particular, we have studied whether financial development and institutional quality that support financial access promote international trade. The study found that access to finance plays a significant role in promoting firm’s ability to export. Unlike institutional quality, financial development indicators positively interact with access to finance to promote firm’s ability to export. The study also found that infrastructure bottlenecks negatively affect firms’ export decisions.

Keywords: Financial Development, Trade, Access to Finance, Institutional Quality, Trade Costs

JEL Classification: D22, F14, O16, O53

Suggested Citation

Kumarasamy, Durairaj and Singh, Prakash, Does Access to Finance Facilitates the Firm's Ability to Export? Experience from Asia-Pacific Countries (September 2, 2016). Durairaj Kumarasamy and Prakash Singh, Does Access to Finance Facilitates the Firm’s Ability to Export? Experience from Asia-Pacific Countries ARTNeT Working Paper Series No. 159, 2016, Bangkok, ESCAP. , Available at SSRN: https://ssrn.com/abstract=2838382

Durairaj Kumarasamy (Contact Author)

Consultant, ASEAN India Centre, Research and Information System for Developing Countries ( email )

India Habitat Centre
Lodhi Road
New Delhi, 110 003
India
8287254499 (Phone)
8287254499 (Fax)

HOME PAGE: http://www.ris.org.in

Prakash Singh

Goa Institute of Management ( email )

Sanquelim Campus, Poriem, Sattari
Ribandar
Sattari, Goa 403505
India

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
225
PlumX Metrics