Abstract
The financial constraints hinder firms’ operations and growth
by limiting their access to working capital and funds for
investment. The current study focuses on the effect of financial
constraints on firms’ exporting tendency in Pakistan. The
logistic regression is employed on the data set taken from
World Enterprise Survey to find the probability of firms’
exporting tendency. The results indicate that financial
constraints and their severity negatively affect firms’ exporting
tendency while firm’s age, size and firms having formally
trained employees increase the exporting tendency. The
manufacturing sector firms are more probable to increase the
exports as compared to services sector firms. The interaction
effect of financial constraints and domestic firm has negative
effect on exporting tendency which reflects that domestic firms
are facing severe financial constraints for their exports as
compared to foreign firms. Similarly, the interaction effect of
financial constraints and manufacturing firm has negative effect
on exporting tendency which explains that manufacturing
sector is facing more financial constraints as compared to
services sector. There is a need for financial access to promote
the firms’ exporting tendency particularly for the domestic
firms and manufacturing sector firms
Syed Mumtaz Ali Kazmi, Rana Ejaz Ali Khan, Syed Muhammad Imran . (2020) Firms’ Financial Constraints and Exporting Tendency in Pakistan, Pakistan Social Sciences Review, Volume 4, Issue 3.
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