The impact of long-term secured loans on exports at the firm-level: the case of a developing country

Author Affiliation

Aadil Nakhoda is Assistant Professor and Research Fellow at CBER, Institute of Business Administration (IBA), Karachi

Faculty / School

Faculty of Business Administration (FBA)


Department of Economics

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Document Type


Source Publication

Journal of International Trade and Economic Development




Growth and Development | Social and Behavioral Sciences


We analyze the role of the accumulation of long-term secured loans on the participation of firms in exporting activities. Internal sources of finance, such as cash balance and its equivalent as well as operating cash flow, may alleviate concerns on liquidity shocks and finance shorter-term variable costs but long-term secured loans are likely to be required to finance fixed costs related to investments in plant, machinery and other fixed assets that complement exporting activities. Exporting activities may involve hysteresis such that the likelihood of a firm to participate in exporting activities is influenced by the accumulation of long-term secured loans in the period prior to the export transactions. Even though the availability of internal sources of finance and the capital structure of a firm has greater economic significance, we observe that lagged long-term secured loans influences participation in exporting activities. Furthermore, we analyze the impact of one-year lagged long-term secured loans on the participation of firms in exporting activities based on the financial characteristics at the industry-level. This relationship holds for firms within industries with higher levels of long-term secured loans, higher levels of finance leverage, higher levels of asset tangibility and lower levels of total assets.

Indexing Information

HJRS - W Category, Scopus, Web of Science - Social Sciences Citation Index (SSCI)

Publication Status


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