IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_4346.html
   My bibliography  Save this paper

World Market Access of Emerging-Market Firms: The Role of Foreign Ownership and Access to External Finance

Author

Listed:
  • Horst Raff
  • Natalia Trofimenko

Abstract

This paper uses micro-data from the World Bank Investment Climate Surveys 2002-2006 to investigate how foreign ownership and access to external finance affect the likelihood of manufacturers in emerging markets to export and/or import. Applying propensity score matching to control for differences across firms in terms of labor productivity, size, etc., we find that foreign ownership and access to external finance are statistically significant determinants of the likelihood that a firm will export or import. Foreign ownership has a large positive impact on the likelihood to engage in direct trade but a negative effect on the likelihood to trade through intermediaries; the effects vary across upper and lower middle income countries. Access to external finance has a modest but positive effect on the likelihood to engage in any of the modes of connecting with foreign customers or suppliers.

Suggested Citation

  • Horst Raff & Natalia Trofimenko, 2013. "World Market Access of Emerging-Market Firms: The Role of Foreign Ownership and Access to External Finance," CESifo Working Paper Series 4346, CESifo.
  • Handle: RePEc:ces:ceswps:_4346
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp4346.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Crozet, Matthieu & Lalanne, Guy & Poncet, Sandra, 2013. "Wholesalers in international trade," European Economic Review, Elsevier, vol. 58(C), pages 1-17.
    2. Lechner, Michael & Wunsch, Conny, 2013. "Sensitivity of matching-based program evaluations to the availability of control variables," Labour Economics, Elsevier, vol. 21(C), pages 111-121.
    3. Andrew B. Bernard & Marco Grazzi & Chiara Tomasi, 2010. "Intermediaries in International Trade: direct versus indirect modes of export," LEM Papers Series 2010/19, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    4. Florian Mayneris & Sandra Poncet, 2015. "Chinese Firms' Entry to Export Markets: The Role of Foreign Export Spillovers," The World Bank Economic Review, World Bank, vol. 29(1), pages 150-179.
    5. Petia Topalova, 2010. "Factor Immobility and Regional Impacts of Trade Liberalization: Evidence on Poverty from India," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 1-41, October.
    6. Sourafel Girma & Yundan Gong & Holger Görg, 2016. "Foreign Direct Investment, Access to Finance, and Innovation Activity in Chinese Enterprises," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT Volume 53: World Scientific Studies in International Economics, chapter 5, pages 79-94, World Scientific Publishing Co. Pte. Ltd..
    7. Holger Görg & David Greenaway, 2016. "Much Ado about Nothing? Do Domestic Firms Really Benefit from Foreign Direct Investment?," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT Volume 53: World Scientific Studies in International Economics, chapter 9, pages 163-189, World Scientific Publishing Co. Pte. Ltd..
    8. Joachim Wagner, 2016. "International Trade and Firm Performance: A Survey of Empirical Studies since 2006," World Scientific Book Chapters, in: Microeconometrics of International Trade, chapter 2, pages 43-87, World Scientific Publishing Co. Pte. Ltd..
    9. Dimitra Petropoulou, 2007. "Information Costs, Networks and Intermediation in International Trade," Economics Series Working Papers 370, University of Oxford, Department of Economics.
    10. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314, World Scientific Publishing Co. Pte. Ltd..
    11. Chaney, Thomas, 2016. "Liquidity constrained exporters," Journal of Economic Dynamics and Control, Elsevier, vol. 72(C), pages 141-154.
    12. Anders Akerman, 2018. "A theory on the role of wholesalers in international trade based on economies of scope," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 51(1), pages 156-185, February.
    13. Carlo Altomonte & Filippo Di Mauro & Gianmarco I. P. Ottaviano & Armando Rungi & Vincent Vicard, 2012. "Global Value Chains During the Great Trade Collapse: A Bullwhip Effect?," CEP Discussion Papers dp1131, Centre for Economic Performance, LSE.
    14. Gabriel Felbermayr & Benjamin Jung, 2011. "Trade Intermediation and the Organization of Exporters," Review of International Economics, Wiley Blackwell, vol. 19(4), pages 634-648, September.
    15. Horst Raff & Joachim Wagner, 2014. "Foreign Ownership and the Extensive Margins of Exports: Evidence for Manufacturing Enterprises in Germany," The World Economy, Wiley Blackwell, vol. 37(5), pages 579-591, May.
    16. Black, Dan A. & Smith, J.A.Jeffrey A., 2004. "How robust is the evidence on the effects of college quality? Evidence from matching," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 99-124.
    17. Kasahara, Hiroyuki & Lapham, Beverly, 2013. "Productivity and the decision to import and export: Theory and evidence," Journal of International Economics, Elsevier, vol. 89(2), pages 297-316.
    18. Deborah L. Swenson, 2008. "Multinationals and the creation of Chinese trade linkages," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 41(2), pages 596-618, May.
    19. Mary Amiti & David E. Weinstein, 2011. "Exports and Financial Shocks," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(4), pages 1841-1877.
    20. Greenaway, David & Guariglia, Alessandra & Kneller, Richard, 2007. "Financial factors and exporting decisions," Journal of International Economics, Elsevier, vol. 73(2), pages 377-395, November.
    21. repec:hal:pseose:halshs-01510997 is not listed on IDEAS
    22. David Greenaway & Richard Kneller, 2007. "Firm heterogeneity, exporting and foreign direct investment," Economic Journal, Royal Economic Society, vol. 117(517), pages 134-161, February.
    23. Crozet, Matthieu & Lalanne, Guy & Poncet, Sandra, 2013. "Wholesalers in international trade," European Economic Review, Elsevier, vol. 58(C), pages 1-17.
    24. Edwards, Sebastian, 1993. "Openness, Trade Liberalization, and Growth in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1358-1393, September.
    25. Jennifer Abel-Koch, 2013. "Who Uses Intermediaries in International Trade? Evidence from Firm-level Survey Data," The World Economy, Wiley Blackwell, vol. 36(8), pages 1041-1064, August.
    26. Dani Rodrik, 2007. "Introductiion to One Economics, Many Recipes: Globalization, Institutions, and Economic Growth," Introductory Chapters, in: One Economics, Many Recipes: Globalization, Institutions, and Economic Growth, Princeton University Press.
    27. Peter Debaere & Holger Görg & Horst Raff, 2013. "Greasing the wheels of international commerce: how services facilitate firms’ international sourcing," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 46(1), pages 78-102, February.
    28. World Bank, 2010. "World Development Report 2010," World Bank Publications - Books, The World Bank Group, number 4387.
    29. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-564, September.
    30. Pinelopi K. Goldberg & Nina Pavcnik, 2004. "Trade, Inequality, and Poverty: What Do We Know? Evidence from Recent Trade Liberalization Episodes in Developing Countries," NBER Working Papers 10593, National Bureau of Economic Research, Inc.
    31. Michele Imbruno, 2014. "Trade Liberalization, Intermediate Inputs and Firm Efficiency: Direct versus Indirect Modes of Import," Discussion Papers 2014-02, University of Nottingham, GEP.
    32. Gabriel Felbermayr & Benjamin Jung, 2011. "Trade Intermediation and the Organization of Exporters," Review of International Economics, Wiley Blackwell, vol. 19(4), pages 634-648, September.
    33. Kalina Manova & Zhiwei Zhang, 2008. "China's exporters and importers: firms, products, and trade partners," Working Paper Series 2008-28, Federal Reserve Bank of San Francisco.
    34. Markusen, James R. & Trofimenko, Natalia, 2009. "Teaching locals new tricks: Foreign experts as a channel of knowledge transfers," Journal of Development Economics, Elsevier, vol. 88(1), pages 120-131, January.
    35. Brian, McCaig, 2011. "Exporting out of poverty: Provincial poverty in Vietnam and U.S. market access," Journal of International Economics, Elsevier, vol. 85(1), pages 102-113, September.
    36. Mirabelle Muûls, 2008. "Exporters and credit constraints. A firm-level approach," Working Paper Research 139, National Bank of Belgium.
    37. Emek Basker & Pham Hoang Van, 2010. "Imports "Я" Us: Retail Chains as Platforms for Developing-Country Imports," American Economic Review, American Economic Association, vol. 100(2), pages 414-418, May.
    38. Beck, Thorsten, 2002. "Financial development and international trade: Is there a link?," Journal of International Economics, Elsevier, vol. 57(1), pages 107-131, June.
    39. Keesing, Donald B, 1983. "Linking Up to Distant Markets: South to North Exports of Manufactured Consumer Goods," American Economic Review, American Economic Association, vol. 73(2), pages 338-342, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Horst Raff & Joachim Wagner, 2014. "Foreign Ownership and the Extensive Margins of Exports: Evidence for Manufacturing Enterprises in Germany," The World Economy, Wiley Blackwell, vol. 37(5), pages 579-591, May.

    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. Dominik Boddin & Horst Raff & Natalia Trofimenko, 2017. "Foreign ownership and the export and import propensities of developing-country firms," The World Economy, Wiley Blackwell, vol. 40(12), pages 2543-2563, December.
    2. Jackie M.L. Chan, 2015. "Trade Intermediation, Financial Frictions, and the Gains from Trade," Discussion Papers 15-009, Stanford Institute for Economic Policy Research.
    3. Sharat Ganapati, 2018. "The Modern Wholesaler: Global Sourcing, Domestic Distribution, and Scale Economies," Working Papers 18-49, Center for Economic Studies, U.S. Census Bureau.
    4. Nucci, Francesco & Pietrovito, Filomena & Pozzolo, Alberto Franco, 2023. "Intermediated trade and credit constraints: The case of firm’s imports," International Economics, Elsevier, vol. 175(C), pages 201-220.
    5. Chan, Jackie M.L., 2019. "Financial frictions and trade intermediation: Theory and evidence," European Economic Review, Elsevier, vol. 119(C), pages 567-593.
    6. Ronald Davies & Tine Jeppesen, 2015. "Export mode, firm heterogeneity, and source country characteristics," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(2), pages 169-195, May.
    7. Parisa Kamali, 2019. "Exporting Through Intermediaries: Impact on Export Dynamics and Welfare," IMF Working Papers 2019/302, International Monetary Fund.
    8. Emmanuel Dhyne & Stela Rubínová, 2016. "The supplier network of exporters : Connecting the dots," Working Paper Research 296, National Bank of Belgium.
    9. Anders Akerman, 2018. "A theory on the role of wholesalers in international trade based on economies of scope," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 51(1), pages 156-185, February.
    10. Tsuyoshi Toshimitsu, 2019. "Trade Intermediaries, the Choice of Export Mode, and the “Learning-By-Exporting” Hypothesis," Discussion Paper Series 190, School of Economics, Kwansei Gakuin University.
    11. Fergal McCann, 2013. "Indirect Exporters," Journal of Industry, Competition and Trade, Springer, vol. 13(4), pages 519-535, December.
    12. Daunfeldt, Sven-Olov & Engberg, Erik & Halvarsson, Daniel & Kokko, Ari & Tingvall, Patrik, 2019. "Wholesale firms: A catalyst for Swedish exports?," Ratio Working Papers 328, The Ratio Institute.
    13. Gaigné, Carl & Latouche, Karine & Turolla, Stéphane, 2015. "Vertical ownership and export performance: firm-level evidence from France," Working Papers 208913, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    14. Dasgupta, Kunal & Mondria, Jordi, 2018. "Quality uncertainty and intermediation in international trade," European Economic Review, Elsevier, vol. 104(C), pages 68-91.
    15. Michele Imbruno, 2014. "Trade Liberalization, Intermediate Inputs and Firm Efficiency: Direct versus Indirect Modes of Import," Discussion Papers 2014-02, University of Nottingham, GEP.
    16. Iacovone, Leonardo & Ferro, Esteban & Pereira-López, Mariana & Zavacka, Veronika, 2019. "Banking crises and exports: Lessons from the past," Journal of Development Economics, Elsevier, vol. 138(C), pages 192-204.
    17. Muûls, Mirabelle, 2015. "Exporters, importers and credit constraints," Journal of International Economics, Elsevier, vol. 95(2), pages 333-343.
    18. Hege Medin, 2022. "Why do firms import via merchants in entrepôt countries rather than directly from the source?," Review of International Economics, Wiley Blackwell, vol. 30(3), pages 854-884, August.
    19. Nunn, Nathan & Trefler, Daniel, 2014. "Domestic Institutions as a Source of Comparative Advantage," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 263-315, Elsevier.
    20. Joachim Wagner, 2016. "A survey of empirical studies using transaction level data on exports and imports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(1), pages 215-225, February.

    More about this item

    Keywords

    international trade; foreign ownership; financing; developing countries; intermediation; multinational enterprise;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

    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:ces:ceswps:_4346. 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: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    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.