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Exports and Financing Constraints Evidence from Turkey

Armağan Gezici, Özgür Orhangazi and Cihan Yalçın


This paper examines the link between financing constraints and firm exporting behavior through an in-depth study of the Turkish manufacturing firms between 1996 and 2013. Utilizing a rich firm-level data set, we test for both ex-ante and ex-post links between exports and financing constraints to tackle potential selection biases and endogeneity problems. We find a positive and statistically significant export premium for financing constraints in general. In further testing we show that there is no significant evidence of pre-entry premium, while we find that financing constraints faced by exporting firms are eased once they start exporting, confirming an improvement in the financial conditions of export starters compared to non-exporters.

JEL Classification: D22; O16; F14


Özgür Orhangazi would like to acknowledge support by the Scientific and Technological Research Council of Turkey (TÜBİTAK), Grant No: 115K762.


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A Variable descriptions

SizeLog of number of employees
ProductivityReal net sales per employee *
ProfitabilityEarnings before interest and taxes as a percentage of net sales
R&DR&D expenditures as a percentage of operating expenses
Capital intensity (K/L ratio)Real capital stock per employee.* Capital stock is computed as tangible fixed assets net of depreciation and land
ScoreSee Section 2 for the construction of the index. The following variables from the data set are used:
Firm sizeTotal assets
Return on assetsEarnings before tax as a percentage of total assets
LiquidityCurrent assets as a percentage of current liabilities
Solvency ratioEquity over liabilities

  1. *TURKSTAT manufacturing price index is used to convert to real values.

Published Online: 2018-5-1

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