2014/16 | LEM Working Paper Series | |
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Financial constraints and firm exports: accounting for heterogeneity, self-selection and endogeneity
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Angelo Secchi, Federico Tamagni and Chiara Tomasi |
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Keywords | ||
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financial constraints, firm exports, self-selection, endogeneity
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JEL Classifications | ||
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F10, F14, F36, G20, G32, L25
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Abstract | ||
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The paper examines the causal effect of financial constraints on firm
exports. We exploit a firm-level proxy of constraints based on
credit ratings and available for a large panel of Italian exporting
and non exporting firms. Our estimation strategy allows to cure for
self-selection into exports and endogeneity of financial
constraints. At the same time, we can control for unobserved firm
fixed effects both in the selection and in the export equation, thus
identifying the effect on exports of within firm changes in
financial constraints status. We find that financial constraints
produce a sizable reduction in the value of firm foreign sales.
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