Year: 2018
Type: dissertation
Abstract: Access to finance has been noted as a vital ingredient in promoting international trade activities of firms.This thesis is a collection of three essays that investigate the effect of financial access on foreign trade activities in sub-Saharan Africa (SSA).Specifically, the study asks the empirical questions of whether access to external finance promotes the overseas market entry decision of firms and also enhances firms' exports size.It also asks whether high levels of financial sector development can help spur commodity export diversification in SSA.The study solicits data from the World Bank and United Nations Conference on Trade and Development (UNCTAD) databases.The first essay examines the influence of external credit (bank credit and non-bank credit) on the likelihood of manufacturing firms to export in Nigeria.The findings show that access to both bank and non-bank credits positively and significantly drive the probability to export in Nigeria, suggesting that increased access to these sources of finance encourage more firms to internationalise in Nigeria.The second essay investigates the effect of external credit (bank credit and 'suppliers and customer' credit) on firms' exports size in Nigeria.The findings here indicate that bank credit is exports-reducing while 'suppliers and customer' credit which is an alternative source of external credit to bank credit is positive and significantly drives exports size.This implies that while improved access to external credit is critical in enhancing firms' exports size, exporters need to be mindful of the characteristics of such credit.The evidence thus far suggests that a relatively more flexible and affordable credit source with long-term repayment plan that meets exporters' needs appears to be more exports-size promoting.The third essay determines how financial development affects commodity export diversification in SSA.The findings reveal a strong positive influence of financial development on commodity export diversification in SSA, suggesting that countries with high level of financial sector development may have more diversified export baskets.
Author: Richard Kofi Akoto
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: green
Funder: Ghana Education Trust Fund
OpenAlex ID: W2946257152