Export Decision and Credit Constraints under Institution Obstacles

Trang Hoai Phan, Rainer Stachuletz and Hai Thi Hong Nguyen

Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL)

Abstract: The growing demand for goods and technology increases capital requirements, especially in exporting enterprises. However, many firms have difficulty accessing external capital due to institutional obstacles. This study analyzes two main issues: the influence of institutional obstacles on credit constraints and the relationship between credit constraints and export decisions, adopting firm-level data from 131 countries. The study’s remarkable contribution is to cluster the data into four country groups based on their national income. The typical specification of each group can lead to more precise results, thereby highlighting the role of institutions. More advanced, this study complements the literature’s gap in the relationship between credit constraints and exports by controlling for institutions as interactive variables in the model. This work upgrades assessments to be more accurate, thereby providing more valuable information to policymakers. In addition, credit constraints are measured by both quantitative and qualitative methods. The essential role of firm size is emphasized in further analysis. This study approaches the Probit method. Furthermore, an instrumental variable is used to solve the endogeneity problem. The results found that a weak institution prevents access to finance, especially in middle-income countries. In addition, firms’ access to capital negatively affects exports in all regions. The finding in the group of rich countries is most pronounced.

Date: 2022
New Economics Papers: this item is included in nep-cfn, nep-dem, nep-fdg, nep-int and nep-sbm
Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/132783/
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Published in Sustainability 9 (2022)

Downloads: (external link)
https://tuprints.ulb.tu-darmstadt.de/21442
https://doi.org/10.3390/su14095638
https://www.mdpi.com/
https://hds.hebis.de/ulbda/EBSCO/Record?id=156873429|edb

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:dar:wpaper:132783

Access Statistics for this paper

More papers in Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL) Contact information at EDIRC.
Bibliographic data for series maintained by Dekanatssekretariat ().