Heterogeneous Firms, Financial Constraints and Export Behaviour: A Firm‐Level Investigation for China

26 Pages Posted: 13 Nov 2017

See all articles by Xiaobing Huang

Xiaobing Huang

Gannan Normal University

Xiaolian Liu

Gannan Normal University

Holger Görg

University of Kiel

Date Written: November 2017

Abstract

We study the impact of access to finance on exports using Chinese firm‐level data. We distinguish two modes of external finance, namely bank loans and issuing stocks to shareholders. We not only consider the impact either of these has individually on export behaviour, but also their interaction. We build the two external sources, as well as internal finance, into a heterogeneous firm‐type model, which allows us to investigate the relationship between financial constraints and firms’ exports. We examine the model’s predictions empirically using a comprehensive longitudinal firm‐level data set from China. Our empirical results are consistent with the theoretical predictions. Firms who have more interest expenditure or can issue stocks to their shareholders have higher propensity to export and export more. Moreover, the more financial options a firm has, the better a firm performs in terms of export volume and export propensity.

Keywords: China, exports, financial constraints, heterogeneous firms

Suggested Citation

Huang, Xiaobing and Liu, Xiaolian and Görg, Holger, Heterogeneous Firms, Financial Constraints and Export Behaviour: A Firm‐Level Investigation for China (November 2017). The World Economy, Vol. 40, Issue 11, pp. 2328-2353, 2017. Available at SSRN: https://ssrn.com/abstract=3069220 or http://dx.doi.org/10.1111/twec.12540

Xiaobing Huang (Contact Author)

Gannan Normal University

Ganzhou
China

Xiaolian Liu

Gannan Normal University

Ganzhou
China

Holger Görg

University of Kiel ( email )

Olshausenstr. 40
D-24118 Kiel, Schleswig-Holstein 24118
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
0
Abstract Views
96
PlumX Metrics