IDEAS home Printed from https://ideas.repec.org/a/bjc/journl/v8y2022i10p84-88.html
   My bibliography  Save this article

Debt Financing and Manufacturing Firms’ Decision to Export: Evidence from Ghana

Author

Listed:
  • Benedict Afful Jr, PhD.

    (Department of Economic Studies, School of Economics, University of Cape Coast, Ghana)

  • Emmanuel Quarshie

    (Cromwell Property Developers Ltd, East Legon, Accra, Ghana)

  • Joseph Kwasi Asafo

    (Network for Socioeconomic Research and Advancement (NESRA), Accra, Ghana)

Abstract

Adequate financial health indeed accelerates the entry of firms into the export market. Many firms, already in the market, have also fizzled out of export market completely due to lack of finance. It is quiet obverse that debt financing influences not only firm’s performance but also firm’s decision export. Hence, evaluating the relationship between debt financing and manufacturing firms’ decision to export from Ghana have relevant policy implication in the context of developing country. To effectively address the objectives, the study employed the probit model on 377 manufacturing firms obtained from the World Bank Enterprise Survey data (Ghana). The study found that debt financing positively influences the decision to export. In other words, an increase in debt financing increases the firm’s probability of exporting in Ghana. Whiles female top managers are less likely to export than their male counterparts, firms with large workforce are more likely to export. Firms with experienced top managers are also likely to export their products. In terms of location, firms in Tema exports more than firms in Accra and Takoradi. The study recommends that the financial market of Ghana be developed to enable manufacturing firms’ source more external funds in the form of debt finance to enable them export.

Suggested Citation

  • Benedict Afful Jr, PhD. & Emmanuel Quarshie & Joseph Kwasi Asafo, 2021. "Debt Financing and Manufacturing Firms’ Decision to Export: Evidence from Ghana," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 8(10), pages 84-88, October.
  • Handle: RePEc:bjc:journl:v:8:y:2022:i:10:p:84-88
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijrsi/digital-library/volume-8-issue-10/84-88.pdf
    Download Restriction: no

    File URL: https://www.rsisinternational.org/virtual-library/papers/debt-financing-and-manufacturing-firms-decision-to-export-evidence-from-ghana/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Flora Bellone & Patrick Musso & Lionel Nesta & Stefano Schiavo, 2010. "Financial Constraints and Firm Export Behaviour," The World Economy, Wiley Blackwell, vol. 33(3), pages 347-373, March.
    2. William W. Olney, 2016. "Impact Of Corruption On Firm-Level Export Decisions," Economic Inquiry, Western Economic Association International, vol. 54(2), pages 1105-1127, April.
    3. Sanghamitra Das & Mark J. Roberts & James R. Tybout, 2007. "Market Entry Costs, Producer Heterogeneity, and Export Dynamics," Econometrica, Econometric Society, vol. 75(3), pages 837-873, May.
    4. Alvarez, Roberto & Zahler, Andrés, 2014. "Export Mix Changes and Firm Performance: Evidence from Chile," IDB Publications (Working Papers) 6514, Inter-American Development Bank.
    5. Roberto Alvarez & Andrés Zahler, 2014. "Export Mix Changes and Firm Performance: Evidence from Chile," IDB Publications (Working Papers) 85354, Inter-American Development Bank.
    6. Minetti, Raoul & Zhu, Susan Chun, 2011. "Credit constraints and firm export: Microeconomic evidence from Italy," Journal of International Economics, Elsevier, vol. 83(2), pages 109-125, March.
    7. Tannous, George F., 1997. "Financing export activities of small Canadian businesses: Exploring the constraints and possible solutions," International Business Review, Elsevier, vol. 6(4), pages 411-431, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Görg, Holger & Spaliara, Marina-Eliza, 2018. "Export market exit and financial health in crises periods," Journal of Banking & Finance, Elsevier, vol. 87(C), pages 150-163.
    2. David Kohn & Fernando Leibovici & Michal Szkup, 2016. "Financial Frictions And New Exporter Dynamics," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(2), pages 453-486, May.
    3. Andrea Caggese & Vicente Cunat, 2013. "Financing Constraints, Firm Dynamics, Export Decisions, and Aggregate Productivity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 177-193, January.
    4. David Kohn & Fernando Leibovici & Michal Szkup, 2021. "Financial Frictions and International Trade," Working Papers 2021-009, Federal Reserve Bank of St. Louis.
    5. Till Gross & Stephane Verani, 2012. "Financing Constraints, Firm Dynamics, and International Trade," 2012 Meeting Papers 1035, Society for Economic Dynamics.
    6. Federico J. Diez & Jesse Mora & Alan C. Spearot, 2016. "Firms in international trade," Working Papers 16-25, Federal Reserve Bank of Boston.
    7. Nakhoda, Aadil, 2012. "The influence of financial leverage of firms on their international trading activities," MPRA Paper 35765, University Library of Munich, Germany.
    8. Philippe Askenazy & Aida Caldera & Guillaume Gaulier & Delphine Irac, 2015. "Financial constraints and foreign market entries or exits: firm-level evidence from France," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(2), pages 231-253, May.
    9. Abu Ayob & Shamshubaridah Ramlee & Aisyah Abdul Rahman, 2015. "Financial factors and export behavior of small and medium-sized enterprises in an emerging economy," Journal of International Entrepreneurship, Springer, vol. 13(1), pages 49-66, March.
    10. David Kohn & Fernando Leibovici & Michal Szkup, 2021. "Financial Frictions and International Trade," Working Papers 2021-009, Federal Reserve Bank of St. Louis.
    11. Almila Burgac Cil & Fikret Dulger, 2018. "Financial Constraints, Firm Characteristics and Exports: Evidence from Turkish Manufacturing Firms," International Journal of Economics and Financial Issues, Econjournals, vol. 8(1), pages 168-174.
    12. M. Padmaja & Subash Sasidharan, 2021. "Financing constraints and exports: evidence from India," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 45(1), pages 118-145, January.
    13. Jackie M.L. Chan, 2015. "Trade Intermediation, Financial Frictions, and the Gains from Trade," Discussion Papers 15-009, Stanford Institute for Economic Policy Research.
    14. Federici, Daniela & Parisi, Valentino & Ferrante, Francesco, 2020. "Heterogeneous firms, corporate taxes and export behavior: A firm-level investigation for Italy," Economic Modelling, Elsevier, vol. 88(C), pages 98-112.
    15. Bergin, Paul R. & Feng, Ling & Lin, Ching-Yi, 2021. "Trade and firm financing," Journal of International Economics, Elsevier, vol. 131(C).
    16. Silvio Contessi & Francesca De Nicola, 2012. "What do we know about the relationship between access to finance and international trade?," Working Papers 2012-054, Federal Reserve Bank of St. Louis.
    17. Kwan Yong Lee, 2023. "Financial dependence and exports: Entrants or incumbents?," Southern Economic Journal, John Wiley & Sons, vol. 89(4), pages 1102-1137, April.
    18. Gopalan, Sasidaran & Reddy, Ketan & Sasidharan, Subash, 2022. "Does digitalization spur global value chain participation? Firm-level evidence from emerging markets," Information Economics and Policy, Elsevier, vol. 59(C).
    19. Angelo Secchi & Federico Tamagni & Chiara Tomasi, 2016. "Financial constraints and firm exports: accounting for heterogeneity, self-selection, and endogeneity," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 25(5), pages 813-827.
    20. Filipe Silva & Carlos Carreira, 2011. "Financial Constraints and Exports: An Analysis of Portuguese Firms During the European Monetary Integration," Notas Económicas, Faculty of Economics, University of Coimbra, issue 34, pages 35-56, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bjc:journl:v:8:y:2022:i:10:p:84-88. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Renu Malsaria (email available below). General contact details of provider: https://rsisinternational.org/journals/ijrsi/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.