Firms’ access to finance, export trade channels and exports in Africa

The paper examines the effects of export trade channels and access to finance on exports in Africa. We employ mixed-effect regression and the dynamic system Generalized Method of Moments (GMM) for a panel dataset of 46 African economies over the period, 2006–2020. First, it contributes to the literature by employing subjective measures of export channels and shows how different measures of access to finance affect them. Second, it examines the direct and independent effect of access to finance and export channels on exports (export intensity and export status). Finally, the study interacts export channels with access to finance to examine their impacts on exports (export intensity and export status). We find that access to finance is more effective in promoting direct export trade channels and hybrid export trade channels compared to indirect export trade channels. We show that small and medium enterprises’ (SMEs’) access to bank finance leads to an increase in the level of exports. We also find that direct and hybrid export channels increase the level of exports, while indirect export channels result in a decline in the level of exports. We provide evidence to support that access to finance complements the overall effect of export trade channels on the level of exports, hence, an increase in the use of specific export trade channels increases the level of exports when SMEs have access to bank finance.