The effect of external credit on firms’ exports size in Nigeria

Financial market inadequacies often constrain overseas trade flows because exporters largely rely on access to external credit to survive. This article examines the influence of external credit (bank finance; and suppliers and customer credit) on exports size of manufacturing firms in Nigeria using...

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Autores principales:	Richard Kofi Akoto, Charles Adjasi
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2021
Materias:	external credit exports size working capital export rejection nigeria sub-saharan africa Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/0854ae2e9cea43dca0d7d4a7d7853606
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spelling	oai:doaj.org-article:0854ae2e9cea43dca0d7d4a7d78536062021-12-02T17:43:42ZThe effect of external credit on firms’ exports size in Nigeria2331-197510.1080/23311975.2021.1930498https://doaj.org/article/0854ae2e9cea43dca0d7d4a7d78536062021-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2021.1930498https://doaj.org/toc/2331-1975Financial market inadequacies often constrain overseas trade flows because exporters largely rely on access to external credit to survive. This article examines the influence of external credit (bank finance; and suppliers and customer credit) on exports size of manufacturing firms in Nigeria using Two-Stage Least Square (2SLS) estimation procedure. We approximate exports size as the ratio of exports over total sales. The study also proxy access to external finance as bank finance as a proportion of total financing while suppliers and customer credit was defined as credit from suppliers and advances from institutional customers as a proportion of total financing. The findings reveal that bank credit is significant and negatively associated with exports size while suppliers and customer credit are positive and significantly drives exports size. Government should put stringent measures in place to ensure that Nigeria’s exports meet overseas standards in terms of high-quality, packaging, and labeling, which are critical in selling exports in the international market. Policy should also be directed at reducing the cost of exporting in Nigeria. Finally, government should also consider establishing innovative tax incentives and credit guarantee schemes to encourage suppliers and institutional customers to extend more flexible credit to exporters.Richard Kofi AkotoCharles AdjasiTaylor & Francis Grouparticleexternal creditexports sizeworking capitalexport rejectionnigeriasub-saharan africaBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 8, Iss 1 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	external credit exports size working capital export rejection nigeria sub-saharan africa Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	external credit exports size working capital export rejection nigeria sub-saharan africa Business HF5001-6182 Management. Industrial management HD28-70 Richard Kofi Akoto Charles Adjasi The effect of external credit on firms’ exports size in Nigeria
description	Financial market inadequacies often constrain overseas trade flows because exporters largely rely on access to external credit to survive. This article examines the influence of external credit (bank finance; and suppliers and customer credit) on exports size of manufacturing firms in Nigeria using Two-Stage Least Square (2SLS) estimation procedure. We approximate exports size as the ratio of exports over total sales. The study also proxy access to external finance as bank finance as a proportion of total financing while suppliers and customer credit was defined as credit from suppliers and advances from institutional customers as a proportion of total financing. The findings reveal that bank credit is significant and negatively associated with exports size while suppliers and customer credit are positive and significantly drives exports size. Government should put stringent measures in place to ensure that Nigeria’s exports meet overseas standards in terms of high-quality, packaging, and labeling, which are critical in selling exports in the international market. Policy should also be directed at reducing the cost of exporting in Nigeria. Finally, government should also consider establishing innovative tax incentives and credit guarantee schemes to encourage suppliers and institutional customers to extend more flexible credit to exporters.
format	article
author	Richard Kofi Akoto Charles Adjasi
author_facet	Richard Kofi Akoto Charles Adjasi
author_sort	Richard Kofi Akoto
title	The effect of external credit on firms’ exports size in Nigeria
title_short	The effect of external credit on firms’ exports size in Nigeria
title_full	The effect of external credit on firms’ exports size in Nigeria
title_fullStr	The effect of external credit on firms’ exports size in Nigeria
title_full_unstemmed	The effect of external credit on firms’ exports size in Nigeria
title_sort	effect of external credit on firms’ exports size in nigeria
publisher	Taylor & Francis Group
publishDate	2021
url	https://doaj.org/article/0854ae2e9cea43dca0d7d4a7d7853606
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The effect of external credit on firms’ exports size in Nigeria

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