Financial Constraints and Exports: Firm Level Evidence from Nigeria

Abstract

The objective of the study is to analyse the interaction between financial constraints and firms’ exporting behaviour in Nigeria. The empirical framework is applied to the 2014 World Bank Enterprise Surveys Indicator Database for Nigeria. The findings revealed that the presence of financial constraints is detrimental to export activity which is measured by the decision to export and the share of exports in total sales. The findings in this research were robust to different measures of financial constraints in the presence of standard control variables predicted by previous empirical and theoretical approaches. The positive effect of better financial stance on the export activity was therefore established. Besides that, this study also identifies credit access as a major factor that contributes to the poor export behaviour of firms’ in Nigeria.