Exports and Financing Constraints Evidence from Turkey

Armağan Gezici 1 , Özgür Orhangazi 2  and Cihan Yalçın 3
  • 1 Keene State College, Keene, USA
  • 2 Kadir Has University, Istanbul, Turkey
  • 3 Central Bank of the Republic of Turkey, Ankara, Turkey
Armağan Gezici, Özgür Orhangazi and Cihan Yalçın

Abstract

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.

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The Review of Middle East Economics and Finance (RMEEF) addresses applied original research in the fields of economics and finance pertaining to the MENA region (Middle East and North Africa), including Turkey and Iran. The journal also publishes articles that deal with the economies of neighboring countries and/or the relationship and interactions between those economies and the MENA region.

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