Financing Constraints, Productivity And Heterogeneous Enterprise Export Performance

For a country, especially in transition and developing, exports is particularly important. Since the reform and opening up, especially in the1990s, China’s export trade develops at an amazing rate. China’s economic growth and export trade are inseparable.With the development of export trade, trade theory developed from absolute advantage and comparative advantage to today’s New-New international trade theory, from a macro perspective to today’s micro-financial data analysis, causes and consequences of trade development has become the central axis of the leading trade theory of development. Macro perspective believes that the development of export trade mainly due to comparative advantage, absolute advantage, but these theories could not explain the reason why trade occurs within industries. Ascending scale effective theory can effectively explain the reason why trade occurs within industries, but cannot explain why different type’s enterprises have different export decisions. New-New international trade theory suggests that companies need to pay certain pre-export costs, the so-called sunk costs. The existence of sunk costs makes part of the liquidity shortage of businesses to stay in the domestic market; well-funded companies take into the international market. Financing constraints become a major threshold for export behavior. The enterprises’ financing from internal financing, thanks in part to higher corporate profits. And the amount of profit primarily from higher productivity, which can have an effective business market share at this time. Therefore, the productivity level becomes another threshold.Against these two thresholds, this paper will research financing constraints, productivity, and export performance for heterogeneous effects. First, at the basis of summarizing financing constraints, productivity and export performance related research; we will present the path financing constraints, the productivity impact on export performance. Secondly, based on the former, with the new-new international trade theory’s typical model, we will construct financing constraints, productivity, and export performance model framework for the overall impact of the conduction path. Finally, having empirical studies on the model framework I will select state-owned enterprises and private enterprises to have comparative analysis.According to theoretical models constructed we believes that companies need sufficient funds to pay export sunk costs, its main funding sources have internal financing and external financing. Internal financing generated from daily earnings. When companies have high productivity, they can pay sunk costs through internal funds. At this time, we can infer that:the higher productivity, the higher export performance. External financing varies depending on the nature of corporate. For state-owned enterprises, bank loans become a major source of their funds. Due to the limitation of its credit private enterprises can hardly own bank loans. When enterprises face lower financing constraints, they can get a higher loan to cover the sunk costs. From this we can infer that:when enterprises face financing constraints, the higher the amount of funds that can melt into, therefore export performance will be higher.This article uses panel data analysis methods to conduct comparative studies of state-owned enterprises and private enterprises, there are some differences between empirical results and theoretical conclusions. Because this paper uses short-term borrowings/total assets to represent the proportion of financing constraints, so that the higher financing constraints, the smaller the liquidity constraints; and the lower financing constraints, the greater the liquidity constraints. It is important to note. Empirical results suggest that the proportion of short-term loans of state-owned enterprises increased by1%, the export performance will be increased by16percentage points:Private enterprises accounted for1%increase in short-term loans, the export performance will be increased by17%points. The role of short-term loans has a greater impact on export performance in private enterprises. Empirical results are consistent with the theoretical analysis.Using TFP expresses enterprises’productivity. Empirical believes that a1%increase in productivity of state-owned enterprises, the export performance will be reduced13.36%; Productivity of private enterprises increased by1%, the export performance will be reduced13.23%. The productivity has a negative effect on export performance. Empirical and theoretical results are contradicted, existed "Productivity Paradox". We believe that the "productivity paradox" is one of China’s characteristics. China’s export trade is mostly processing trade. China’s comparative advantage lies in cheap labor, low productivity. Therefore, the negative effects of the productivity to export performance, particularly has its rationality of existence.This article uses the enterprise scale and capital intensity as control variables. Theories think that the raising of firm size and capital intensity can bring economies of scale. Thereby productivity will be increased, enterprise will get more profits. This helps enterprises own more internal financing to expand further development of export trade. That effect of firm size and capital intensity on export performance should be positive effects. This collusion is inconsistent with the empirical results. To further verify t the role of carport’s nature in financing constraints and the productivity affecting the export performance model we will have empirical test again. Using dummy variables represent carport’s nature. It was found that the impact of private enterprises reached59.14%which is higher than state-owned enterprises. We believe that, due to the lower credit quality of private enterprises which generally lower than state-owned enterprises, banks more prefer state-owned enterprises, and private enterprises suffer higher liquidity constraints. In general, for the processing trade, if private enterprises’ liquidity constraints are smaller, export performance impact on the entire country will be greater.