Financial Health and the Intensive Margin of Trade
25 Pages Posted: 12 Sep 2014 Last revised: 11 Dec 2016
Date Written: December 10, 2016
Abstract
Using data on 2380 firms from nine emerging countries, this paper shows that there is a positive and significant relationship between financial health and the intensive margin of trade. The magnitude of this positive relationship is shown to depend on several firm characteristics, where the effects of financial health on firm-level exports are larger for firms with higher levels of export, bigger size (measured by assets), higher productivity (measured by value added per worker), and moderate levels of financial health (measured by cash flow over total assets). The results are robust to the consideration of foreign ownership and country characteristics as well as industry and time fixed effects.
Keywords: Financial Health; Intensive Margin of Trade; Threshold Analysis; Emerging Markets
JEL Classification: D24, F10, F14
Suggested Citation: Suggested Citation