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Does easing access to foreign financing matter for firm performance?

Bose, Udichibarna and Mallick, Sushanta and Tsoukas, Serafeim (2020) 'Does easing access to foreign financing matter for firm performance?' Journal of Corporate Finance, 64. ISSN 0929-1199

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Abstract

Financial reforms have been found to be highly important in promoting aggregate productivity. Yet, the linkage between access to finance, firm-level productivity, and exporting performance has been overlooked in the literature. We fill this gap using a rich dataset of 11,612 Indian firms over the period 1988-2014 to study the impact of a unique financial policy intervention on firm performance. We document a significant effect of capital-account liberalization through the lens of an export-oriented policy initiative on firms’ productivity and consequently on their exporting activity. Finally, we find that the beneficial effect of the policy change is more pronounced for financially vulnerable firms, as measured by high debt and low liquidity.

Item Type: Article
Uncontrolled Keywords: Productivity, Exporting, Foreign financing, FX market liberalization
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Finance Centre
Depositing User: Elements
Date Deposited: 06 Jun 2020 15:07
Last Modified: 10 Dec 2020 14:15
URI: http://repository.essex.ac.uk/id/eprint/27829

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