Abstract
This study uses strictly comparable data for small and medium sized enterprises from industry or services in 25 European countries to test for links between credit restrictions and export activities of firms (participation in exports and share of exports in total sales). Data were collected in the Survey on Access to Finance of Enterprises (SAFE) conducted on behalf of the European Commission and the European Central Bank. Credit restrictions are measured by the importance of problems related to access to finance reported by the firms. Contrary to the big picture revealed by a comprehensive literature survey a statistically significant negative relationship between more severe problems in access to finance and exports is only rarely found.
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Notes
See Wagner (2014) for details and for exceptions with results that differ from this big picture. Studies that look at the direction of the link between exports and financial constraints usually report that less constraint firms self-select into exporting, but that exporting does not improve financial health of firms; an exception is Greenaway et al. (2007) that report an opposite result for the UK.
The exception is the study by de de Matteis et al. (2016) for Italy.
The survey is described in detail in European Central Bank (2017). To access the micro-data go to https://www.ecb.europa.eu/stats/ecb_surveys/safe/html/index.en.html and follow the instructions in the section “Access to microdata”.
Using a more objective measure instead of a perception reported by the firms would be important. However, the data at hand are not rich enough to do so. There are questions in the survey that ask for loan applications, credit refusals and discouraged borrowers. However, only a handful of firms answered these questions and revealed that they are either discouraged borrowers, or that they applied for bank loans but were refused or did receive only a small share instead of the whole sum. To be more precise, in the data set from waves 11, 13, 15 and 17 (i.e. the waves with information on export activities) we have data for 62,904 firms that answered the question on exports and on “problem: access to finance”. Only 2264 of these firms said that they are “discouraged borrowers” (answer “2” in q7a_a_rec), and only 823 (711) that an application for a bank loan was refused (that they only received a tiny part of it), answering “4” or “6” in q7a_a_rec. This leads to tiny estimation samples and, therefore, these alternative measures cannot be used.
Note that some firms participated in more than one wave. The ECB classifies a company as a panel if it participated in the survey at least twice, though not necessarily in consecutive waves. While the share of panels in all firms in the waves used here is more than 50% according to this definition (see European Central Bank 2017, p. 10) the number of firms present in all four waves is far too small to exploit the panel character of the data in a convincing way.
These variables are expected to be related to export activities at the firm level, and they are standard in the literature (see e.g. Wagner 2001). Given that they are used as control variables only here, they are not discussed in any detail.
To economize on space the estimated marginal effects for the control variables are no included in the tables. Information is available from the author on request.
In a robustness check all empirical models were estimated with a quadratic term of the credit restriction index added to test for a non-linear relationship between problems of access to capital and margins of exports. The big picture that results from this robustness check is identical to that reported in Table 4 and Table 5; details are available from the author on request.
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Acknowledgements
I thank three anonymous referees for carefully reading my paper and making suggestions for improvements. The firm level data used in this study were collected in the Survey on Access to Finance of Enterprises (SAFE) conducted on behalf of the European Commission (DG Internal Market, Industry, Entrepreneurship and SMEs) and the European Central Bank (ECB). To request the anonymized microdata, go to the SAFE webpage at https://www.ecb.europa.eu/stats/ecb_surveys/safe/html/index.en.html and follow the instructions in the section “Access to microdata”. To facilitate replication the Stata-do-files used are available from the author on request.
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Wagner, J. Access to Finance and Exports – Comparable Evidence for Small and Medium Enterprises from Industry and Services in 25 European Countries. Open Econ Rev 30, 739–757 (2019). https://doi.org/10.1007/s11079-019-09534-w
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DOI: https://doi.org/10.1007/s11079-019-09534-w