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The Different Impact of Financial Constraints on Firm-Level Exports in Manufacturing and Service Sector: Evidence from Croatia

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The Changing Financial Landscape

Part of the book series: Contributions to Economics ((CE))

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Abstract

Extant studies examine the role of financial constraints on the international activity of the firms. However, they are mostly focused on the manufacturing sector, traditionally perceived as tradable. The literature recently recognized the growing role of service sector in international trade, but the analysis of financial constraint on exporting behaviour of this segment of the economy has seldom been performed. This is of particular importance for economies with pronounced de-industrialization and high share of tourism sector, such as Croatia. The analysis in this paper rests on a balance sheet data of Croatian firms during the 1999–2017 period, divided into pre- and post-global financial crisis period. The second novelty of the paper is that assessment of financial constraint is based on the firm-level data. The results suggest an increase in the importance of financial constraints in the period since the crisis, in particular for manufacturing sector. In the case of service sector, financial constraints are significant only for microfirms.

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Notes

  1. 1.

    More information on the Survey can be found at https://ebrd-beeps.com/.

  2. 2.

    For example, expectations regarding future employment security in trade-related industries may differentially affect regional labour supply responses to trade-based employment shocks compared with domestic shocks (Partridge et al., 2017).

  3. 3.

    The full set of each of the 31 estimates can be obtained from the author upon request.

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Authors and Affiliations

  1. The Institute of Economics, Trg J. F. Kennedy 7, 10000, Zagreb, Croatia

    Valerija Botrić

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  1. Valerija Botrić
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Correspondence to Valerija Botrić .

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Editors and Affiliations

  1. Faculty of Tourism and Hospitality Management, University of Rijeka, Opatija, Croatia

    Goran Karanovic

  2. Department of Economics, International Hellenic University, Serres, Greece

    Persefoni Polychronidou

  3. Department of Accounting and Finance, International Hellenic University, Kavala, Greece

    Anastasios Karasavvoglou

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Botrić, V. (2021). The Different Impact of Financial Constraints on Firm-Level Exports in Manufacturing and Service Sector: Evidence from Croatia. In: Karanovic, G., Polychronidou, P., Karasavvoglou, A. (eds) The Changing Financial Landscape. Contributions to Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-82778-6_2

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