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Trade and Access to Finance of SMEs: is There a Nexus?

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  • Hala El-Said
  • Mahmoud Al-Said
  • Chahir Zaki

    (Cairo University)

Abstract

Limited resources and barriers to entry are critically higher for small and medium enterprises (SMEs) than for large companies. One of the reasons explaining why the resources of SMEs are scarce is their limited access to financial services. This, in turn, reduces their likelihood of exporting. With this in mind, using the census of SMEs done by the Central Bank of Egypt and the Egyptian Banking Institute (EBI), we try to examine the impact of access to finance on SMEs’ export performance. We measure the latter by the extensive margin that means the probability of becoming an exporter and the probability of serving several markets. We found a significant and positive impact on the probability of exporting and that of exporting to more than one destination from dealing with banks and having banking facilities. Thus, wider and more efficient financial services are likely to increase the number of exporters and boost exports diversification.

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  • Hala El-Said & Mahmoud Al-Said & Chahir Zaki, 2015. "Trade and Access to Finance of SMEs: is There a Nexus?," Working Papers 903, Economic Research Forum, revised Apr 2015.
    • Handle: RePEc:erg:wpaper:903
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    Cited by:

    1. Mohamed Abouelhassan Ali & Moaaz Kabil & Rahaf Alayan & Róbert Magda & Lóránt Dénes Dávid, 2021. "Entrepreneurship Ecosystem Performance in Egypt: An Empirical Study Based on the Global Entrepreneurship Index (GEI)," Sustainability, MDPI, vol. 13(13), pages 1-22, June.
    2. Antonio Molina-García & Julio Diéguez-Soto & M. Teresa Galache-Laza & Marta Campos-Valenzuela, 2023. "Financial literacy in SMEs: a bibliometric analysis and a systematic literature review of an emerging research field," Review of Managerial Science, Springer, vol. 17(3), pages 787-826, April.
    3. Marion Dovis & Chahir Zaki, 2020. "Global Value Chains and Local Business Environments: Which Factors Really Matter in Developing Countries?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 57(2), pages 481-513, September.
    4. Nam Hoang Vu & Tuan Anh Bui & Tram Bao Hoang & Hanh My Pham, 2022. "Information technology adoption and integration into global value chains: Evidence from small‐ and medium‐sized enterprises in Vietnam," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(2), pages 259-286, March.
    5. Donald O. E. Amadasun & Ashley T. Mutezo, 2022. "Influence of access to finance on the competitive growth of SMEs in Lesotho," Journal of Innovation and Entrepreneurship, Springer, vol. 11(1), pages 1-20, December.
    6. Lee, Chien-Chiang & Wang, Chih-Wei & Ho, Shan-Ju, 2022. "Financial aid and financial inclusion: Does risk uncertainty matter?," Pacific-Basin Finance Journal, Elsevier, vol. 71(C).
    7. Dominykas Poderys, 2015. "Does Access to External Finance Affect Development of Small and Medium Enterprises and Economic Growth?," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 1(1), pages 43-53.

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