Template-Type: ReDIF-Paper 1.0
Author-Name: Raoul Minetti 
Author-X-Name-First: Raoul
Author-X-Name-Last: Minetti
Author-Email: minetti@msu.edu
Author-Workplace-Name: Michigan State University 
Author-Name: Pierluigi Murro 
Author-X-Name-First: Pierluigi 
Author-X-Name-Last: Murro
Author-Email: p.murro@lumsa.it
Author-Workplace-Name: LUMSA University
Author-Name: Zeno Rotondi
Author-X-Name-First: Zeno 
Author-X-Name-Last: Rotondi
Author-Email: zeno.rotondi@unicredit.eu
Author-Workplace-Name: UniCredit Bank
Author-Name: Susan Chun Zhu 
Author-X-Name-First: Susan Chun
Author-X-Name-Last: Zhu
Author-Email: zhuc@msu.edu
Author-Workplace-Name: Michigan State University
Title: Financial Constraints, Firms' Supply Chains and Internationalization

Abstract: Using a unique sample of small and medium-sized Italian firms, we investigate the effect of financial constraints on firms' participation in domestic and international supply chains. We find that firms more exposed to credit rationing and with weaker relationships with banks are more likely to participate in supply chains to overcome liquidity shortages. This benefit of supply chains is especially strong when firms forge ties with international trading partners and when they establish long-term relationships with large suppliers. To control for possible endogeneity of firms' access to credit, we construct instruments capturing exogenous shocks to the structure of the Italian local banking markets.

Length: 57 pages
Creation-Date: 2016-02
Publication-Status: 
File-URL: https://repec.lumsa.it/wp/wpC06.pdf
File-Format: Application/pdf
Number: wpC06
Classification-JEL: F10; G20; L23
Keywords: Credit; Global Value Chains; Internationalization
Handle: RePEc:lsa:wpaper:wpC06