NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Firm Exports and Multinational Activity Under Credit Constraints

Kalina Manova, Shang-Jin Wei, Zhiwei Zhang

NBER Working Paper No. 16905
Issued in March 2011
NBER Program(s):   IFM   ITI

This paper provides firm-level evidence that credit constraints restrict international trade flows and affect the sectoral pattern of multinational activity. Using detailed customs data from China, we show that foreign affiliates and joint ventures have better export performance than private domestic firms in financially more vulnerable sectors. These results are stronger for destinations with higher trade costs and not driven by variation in firm size or by other sector determinants of FDI. Our findings are consistent with multinational subsidiaries being less liquidity constrained because they can tap additional funding from their parent company and/or access foreign capital markets. More broadly, they suggest that FDI can alleviate the impact of domestic financial market imperfections on aggregate growth, trade and private sector development.

download in pdf format
   (247 K)

email paper

This paper is available as PDF (247 K) or via email.

This paper was revised on May 29, 2014

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w16905

Firm Exports and Multinational Activity under Credit Constraints” Review of Economics and Statistics (forthcoming). (with Shang-Jin Wei and Zhiwei Zhang)

Users who downloaded this paper also downloaded these:
Chaney w19170 Liquidity Constrained Exporters
Manova and Yu w18561 Firms and Credit Constraints along the Global Value Chain: Processing Trade in China
Manova and Zhang w15249 China's Exporters and Importers: Firms, Products and Trade Partners
Manova w14531 Credit Constraints, Heterogeneous Firms, and International Trade
Feenstra, Li, and Yu w16940 Exports and Credit Constraints Under Incomplete Information: Theory and Evidence from China
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us