RIS Breakfast Seminar
RIS Seminar Notice
Venue: G. Parthasarathi Conference Hall, RIS
Topic: The role of Financial Access and Financial Development on Firm’s Exportability: Empirical Evidence from Asia-Pacific
Chair: Shri T.C.A. Ranganathan, former Chairman and Managing Director, EXIM Bank of India
Speaker: Dr. Durairaj Kumarasamy, Consultant, ASEAN India Centre, RIS
This study attempts to examine how access to finance and financial development affects firm’s ability to export in Asia–Pacific countries. Using firm level data from World Bank Enterprises Survey, we found that access to finance plays an important role in promoting the firm’s ability to export. In addition, development in financial sector translates into a higher likelihood of firm entering into export market. The effect of financial development is more prominent in terms of reach of the banking sector. We also found that interplay between access to finance, financial development and location reduces the negative effect of location on firm’s ability to export. The study suggests that improvement in access to finance and financial development (increase in reach of banking sector), firms operating away from capital or main cities would find export market entry easier. The study supports that strengthening financial development would encourage firm’s exportability, and also emphasises the need of access to finance to facilitate the firm’s exporting activities for remotely located places.