Abstract
This chapter studies factors associated with firm participation in export markets, focusing primarily on firm size and access to credit, based on a survey sample comprising observations of 8,080 small and medium-sized enterprises (SMEs) (with fewer than 100 employees) and non-SME firms in developing East Asian countries across sectors. The main findings suggest the interdependent relationships between export participation, firm size, and access to credit. SMEs participating in export markets tend to gain more access to credit, while potential scale economies (firm sizes) of SMEs are positively associated with participation in export markets. The estimation results also point to the supportive influences of foreign ownership, worker education, and production certification on export participation, and the positive effects of financial certification, managerial experience, and collateral/loan value on access to credit for SMEs.
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Notes
- 1.
That is, only firms that are productive enough can shoulder the considerable sunk costs that come with serving overseas markets.
- 2.
The literature makes a distinction between trade credit and trade finance: the former refers to agreements allowing buyers to pay suppliers at a later date; the latter to trade-related borrowings from financial institutions. In this chapter, “access to credit” refers jointly to trade credit and trade finance, since we make references to both in the empirical sections.
- 3.
Available upon request.
- 4.
Details of the data procedures are available upon request.
- 5.
Subject to data availability, textiles, leather, garments, and food are classified as labor-intensive sectors. Metals and machinery, electronics, chemicals and pharmaceuticals, wood and furniture, non-metallic and plastic materials, auto components, and other manufacturing are classified as capital-intensive sectors. Retail and wholesale trade, hotels and restaurants, and other services are classified as services sectors.
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Jinjarak, Y., Mutuc, P.J., Wignaraja, G. (2016). SME Finance and Trade at the Firm-Level: Evidence from the People’s Republic of China and ASEAN Economies. In: Wignaraja, G. (eds) Production Networks and Enterprises in East Asia. ADB Institute Series on Development Economics. Springer, Tokyo. https://doi.org/10.1007/978-4-431-55498-1_11
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