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Access to Finance, Financial Development and Manufacturing Firms' Export: Insights from Enterprise Surveys in Africa

Author

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  • Mustapha Jobarteh

    (University of The Gambia, Gambia)

Abstract

For Africa to attain industrialization, it has to not only boost manufacturing output but also be able to penetrate foreign markets for its produce. Yet, the level of export penetration among African manufacturing firms is very modest, triggering the question: What determine the low level of African manufacturing exports? In this paper, we examine the role of access to finance and financial development in African manufacturing firms' decision to export. Unlike previous literature on trade-finance nexus for Africa, we use survey data during 2013-2018 period for a group of thirty (30) African countries, applying it to a Probit model of export participation and a Tobit model of export intensity. Our findings show that firms with greater access to finance have greater propensity and intensity to export, and firms located in financially more developed countries export more manufacturing produce. These results are robust to a host of different measures of access to finance and financial development, as well as controlling for possible endogeneity.

Suggested Citation

  • Mustapha Jobarteh, 2024. "Access to Finance, Financial Development and Manufacturing Firms' Export: Insights from Enterprise Surveys in Africa," The African Finance Journal, Africagrowth Institute, vol. 26(2), pages 43-57.
    • Handle: RePEc:afj:journl:v:26:y:2024:i:2:p:43-57
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    File URL: https://journals.co.za/doi/abs/10.10520/ejc-finj_v26_n2_a3
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    More about this item

    Keywords

    Access to Finance; Financial Development; Export; Africa;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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