Research On The Impact Of Financial Constraint On Chinese Industrial Firms’ Export

This paper examines the impact of financial constraint on the export behaviour of Chinese industrial firms using a large firm-level database that comprises all of China’s manufacturing firms and spans the period of 1998 to 2007. And it starts the analysis under the basic framework of the theory of heterogeneous firms created by Melitz(2003), and treats financial constraint as a heterogeneous factor of firms. This paper uses the OLS estimator and Fixed-effect estimator to estimating the impact of three different financial constraints on Chinese manufacturing firms.This paper first takes the comprehensive analysis of the whole samples and then makes a further analysis of the impact of financial constraints on different firms’ exporting behaviour divided by their ownership.The results indicate that financial constraint ease can significantly promote the exporting behaviour of Chinese industrial firms. Specifically, the three types of financing ways (endogenous financing, commercial credit, and exogenous financing) can all improve the firms’exporting behavior by alleviating the financial constraints, but to different extents. And the exogenous financing (mainly measured by bank credit) contributes the most, while endogenous financing ranks the second. Furthermore the contribution of commercial credit is minimal. In fact, this is also in line with the financing status-quo of Chinese enterprises.Considering the firm’s ownership, the results show that the impacts of financial constraint on different types of firms are varied. Comparing to domestic firms, the effect of financial constraint ease on foreign firms in promoting exports is more obvious. And foreign firms show overall export advantage over domestic ones. At the same time, although compared to the state-owned firms, private firms have a larger possibility to encounter credit discrimination in the credit market. However, there are no significant differences of the exporting performance between state-owned firms and private firms, while the latter usually have a larger possibility to encounter credit discrimination in the credit market compared to state-owned firms. Moreover, the impact of financial constraint ease on the state-owned and private firms’exporting behaviour is not so significant.