Firm Size, Financial Constraints And Intensive Export Margin

The paper studies the causal relationship between the extent of external debt financing and the intensive margin of exports for firms of different size. The authors use detailed balance sheet data with information on sources of financing for a set of Slovenian firms for the period 2001-2008. The authors apply the continuous matching technique to control for the key variables and consider three modes of financing, firm own cash flow, bank loans and borrowing in internal credit markets. The authors find clear evidence that taking on any additional finance help firms to expand exports.