ERIA-DP-2015-27
ERIA Discussion Paper Series
Exporting and Firm-Level Credit Constraints
Evidence from Ghana
Mai Anh NGO
University of North Carolina at Chapel Hill
March 2015
Abstract: This paper models how firms finance their fixed costs
of exporting
through internal financing from retained earnings and external
financing
(borrowing from banks). The theoretical model featrues firms
with heterogeneity in
productivity, liquidity and collateral. It also models
bankslending decisions
explicitly, allowing for endogenous firm default rate as well as
allowing for the
loand interest rate to depend on firmscharacteristics. The model
predicts that
credit access has a positive impact on firmsexport propensity
and that this effect is
only signifincant form firms in the intermediate range of
producitivity. These
predicitons are suppoted by the empirical analysis of a
longitudinal data set of
Ghanaian firms and the empirical resluts are robust to various
robustness checks.
