Cash-in-advance, export decision and financial constraints: Evidence from cross-country firm-level data

Thang, Doan Ngoc; Vu, Thi Kim Chi; Nguyen, Thi Cam Thuy; Nguyen, Thi Hong Hai; Nguyen, Kieu Trang

doi:10.1016/j.iref.2020.04.013

Cited by 13 publications

(16 citation statements)

References 30 publications

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“…A similar strategy has been used by Doan et al. ( 2020 ), Fauceglia ( 2015 ), Máñez and Vicente-Chirivella ( 2020 ) to capture the influence of financial constraints on exports, while Jinjarak and Wignaraja ( 2016 ) and Secchi et al. ( 2016 ) use other two-step approaches that are similar in spirit.…”

Section: Methodsmentioning

confidence: 99%

“…Exporters also have higher working capital needs relative to those of domestic manufacturers due to longer shipping times (see Doan et al. 2020 ; Foley and Manova 2015 ).…”

Section: Literature Reviewmentioning

confidence: 99%

“…The delay between the payment and the delivery of goods is longer, contract enforcement is less guaranteed, and exporters face the additional risk of damage and additional insurance costs (Doan et al. 2020 ). Financing trade transactions thus faces more obstacles than financing domestic ones.…”

Section: Introductionmentioning

confidence: 99%

“…However, most studies focus only on one country, except (Doan et al. 2020 ), thus reducing the possibility of generalizing their results.…”

Section: Introductionmentioning

confidence: 99%

“…( 2010 ), who show that inventory dynamics play an important role in explaining the volatility of trade, and Doan et al. ( 2020 ), who study the role of cash in advance, a form of trade credit on the participation of small- and medium-sized firms in exports. If exporters rely on inventories in response to supply or demand shocks, the most common source of internal financing for exporters comes from credits between exporters and importers.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Working capital management, financial constraints and exports: evidence from European and US manufacturers

Mansilla-Fernández

Baleix

2022

Empir Econ

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This paper investigates the effect of firms’ working capital management, measured by the cash conversion cycle (CCC) on exports, on both the intensive and extensive margins. By using Heckman’s two-stage model for the treatment of sample selection bias, we find that the longer the CCC, the lower firms’ likelihood of exporting and the lower the volume of their exports. This phenomenon is economically more relevant for financially constrained firms than for unconstrained firms. The results are robust to the propensity score matching, the transition sample and the placebo analyses. Finally, these results can be extrapolated in the context of the COVID-19 crisis because of the decline in trading conditions and firms’ shortage of liquidity.

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Section: Methodsmentioning

confidence: 99%

“…Exporters also have higher working capital needs relative to those of domestic manufacturers due to longer shipping times (see Doan et al. 2020 ; Foley and Manova 2015 ).…”

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

“…However, most studies focus only on one country, except (Doan et al. 2020 ), thus reducing the possibility of generalizing their results.…”

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Working capital management, financial constraints and exports: evidence from European and US manufacturers

Mansilla-Fernández

Baleix

2022

Empir Econ

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Open account, import decision and financial constraints: A cross‐country firm‐level study

Nguyen

Thang

2022

Int. J Fin Econ

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This paper uses cross‐country firm‐level data to investigate the influence of an open account on import decisions of firms facing financial constraints. In the open account method, buyers pay after shipment. We employ the sector‐location average as an instrumental variable to deal with the endogeneity problem. Our empirical results provide evidence that an open account positively affects import possibility, particularly, in large‐sized financially‐constrained firms. Our findings imply that large‐sized firms possess more bargaining power than small‐ and medium‐sized firms when negotiating payment terms in importing contracts, especially under severe financial constraints. These findings may suggest several vital implications for the import promotion policy.

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The nonlinear relationship between digital affordances and firm‐level export performance: The moderating role of organizational ambidexterity

Erdey,

Liu,

Nagy

2024

Manage Decis Econ

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A diminished trade cost has been ascribed to the advancement of digital transformation, particularly digital technologies and platforms. Nevertheless, whether this decline in trade costs manifests in the extensive or intensive margin of trade remains an unresolved query. This study conducts a comprehensive analysis of the influence of digital affordances on firm‐level export performance. Specifically, we posit that digital affordances will manifest a convex influence on firms' export decisions and intensive margin of export. Furthermore, we propose that the relationship between digital affordances and firm‐level export decisions will be contingent upon the degree of firms' organizational ambidexterity. To empirically test our hypotheses, we leverage a dataset comprising 13,251 firm‐level observations gathered by the World Bank Enterprise Surveys (WBES) unit across 19 Organization for Economic Cooperation and Development (OECD) countries. Our study substantiates a U‐shaped nexus between digital affordances and firm‐level export performance. Importantly, our analysis supports that this U‐shaped nexus is accentuated when firms present a high level of organizational ambidexterity.

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Cash-in-advance, export decision and financial constraints: Evidence from cross-country firm-level data

Cited by 13 publications

References 30 publications

Working capital management, financial constraints and exports: evidence from European and US manufacturers

Working capital management, financial constraints and exports: evidence from European and US manufacturers

Open account, import decision and financial constraints: A cross‐country firm‐level study

The nonlinear relationship between digital affordances and firm‐level export performance: The moderating role of organizational ambidexterity

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