Finance and export: investigating the signaling effect of foreign market penetration

The last few years, more and more research has been carried out on the relation between financial questions and export strategy, on a theoretical and empirical level (Greenaway and al . 2007, Bellone and al . 2010, Minetti and Zhu 2011, Chaney 2013, Felbermayr and Spiegel 2014). Empirical studies highlight the existence of a double-directional link between financial characteristics and international activity. On the on hand internal liquidity and external financial resources are associated to a company’s capacity to enter global markets, as access to credit represents a serious constraint on global expansion strategies (Bellone and al 2010; Minetti and Zhu 2011). On the other hand, access to foreign markets may improve the capacity of companies to gain access the financial resources (Greenaway and al. 2007). This may be due to greater risk diversification and so a less vulnerability to shocks, more resilient cash flow circuits, higher profit margins, faster company growth. All these elements can reduce financial constraints by signaling their creditworthiness to outside investors. We will thus aim to see if entering foreign markets influences access to external financing.