Effects of Financial Market Imperfections on Indian Firms' Exporting Behavior

Publication | May 2011

This paper investigates the impact of financial constraints on the exporting behavior of Indian manufacturing firms using data from more than 6,000 manufacturing firms in India for 1996-2008. The authors find empirical evidence that Indian manufacturing firms tend to self-finance their exporting without relying too much on external finances, which indicates that firms face financial constraints. Recent financial liberalization in India still does not seem to allow the financial system to meet the stronger demand for funds by firms. The country's financial system needs to develop further.


  • Abstract
  • Introduction
  • Theoretical Foundation
  • Data and Summary Statistics
  • Estimation
  • Concluding Remarks
  • Appendix
  • References