Financial constraints and export decision: evidence from vietnamese manufacturing listed firms in Ho Chi Minh stock exchange

Abstract

This research investigates the influences of financial constraints on export decision of 75 Vietnamese manufacturing listed firms in HOSE during 2007–2016. The financial constraints are approximated by financial variables including long-term debt to total capital, leverage and liquidity ratios. The researcher then estimates the impact of these financial fundamentals on the export decision in population average probit models combing with Bootstrap method. The empirical results confirm the negative influence of financial constraints on the decision of participating in the export markets which are consistent with previous theoretical works. Financial constrained manufacturing firms are less likely to become exporters than others. The robustness check of the findings by adding the interactions between each independent variables with three control variables also confirm the main findings of this research.