Export and Innovation in Small and Medium Enterprises: The Role of Concentrated Bank Borrowing

28 Pages Posted: 7 Dec 2017

See all articles by Maria Luisa Mancusi

Maria Luisa Mancusi

Department of Economics and Finance; Università Cattolica del Sacro Cuore (UCSC)

Andrea Vezzulli

UECE - Research Unit on Complexity in Economics

Serena Frazzoni

Zeno Rotondi

UniCredit Group

Maurizio Sobrero

University of Bologna - Department of Management

Date Written: January 2018

Abstract

This paper assesses the role of concentrated bank borrowing in explaining the extensive and intensive margins of export, while accounting for the simultaneous relationship between exporting and innovation. Concentrated bank borrowing proxies for the intensity of the bank–firm relationship and is a strategy often pursued by small and medium enterprises (SMEs) in order to overcome information asymmetries and improve access to external finance. Our results show that a tight relationship between an SME and its main bank increases both the firm's probability of exporting and its export intensity. This positive effect is only marginally mediated by the SME's increased propensity to introduce product innovation. We further discuss the financial and non‐financial channels through which the intensity of the bank–firm relationship supports SMEs' international activities.

Suggested Citation

Mancusi, Maria Luisa and Vezzulli, Andrea and Frazzoni, Serena and Rotondi, Zeno and Sobrero, Maurizio, Export and Innovation in Small and Medium Enterprises: The Role of Concentrated Bank Borrowing (January 2018). Economica, Vol. 85, Issue 337, pp. 177-204, 2018. Available at SSRN: https://ssrn.com/abstract=3083173 or http://dx.doi.org/10.1111/ecca.12252

Maria Luisa Mancusi (Contact Author)

Department of Economics and Finance; Università Cattolica del Sacro Cuore (UCSC) ( email )

1 Largo A. Gemelli
Milano (Milan), MI Milano 20123
Italy

Andrea Vezzulli

UECE - Research Unit on Complexity in Economics ( email )

ISEG/UTL, Rua Miguel Lupi 20
Lisboa, 1249-078
Portugal

HOME PAGE: http://pascal.iseg.utl.pt/~uece/peoplefellows.shtml

Zeno Rotondi

UniCredit Group ( email )

Via Andegari, 12
Milan, 20122
Italy

Maurizio Sobrero

University of Bologna - Department of Management ( email )

Via Capo di Lucca 34
40126 Bologna, Bologna 40126
Italy
+39 051 2098076 (Phone)

No contact information is available for Serena Frazzoni

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