Export intensity of foreign subsidiaries of multinational enterprises: the role of trade finance availability

Nguyen, Q. T. K. ORCID: https://orcid.org/0000-0003-0179-3973 and Almodóvar, P. (2018) Export intensity of foreign subsidiaries of multinational enterprises: the role of trade finance availability. International Business Review, 27 (1). pp. 231-245. ISSN 0969-5931 doi: 10.1016/j.ibusrev.2017.07.004

Abstract/Summary

We examine the relationship between the role of trade finance availability and the export intensity of foreign subsidiaries of multinational enterprises (MNEs). In developing our hypotheses, we draw upon insights derived from “new” internalisation theory (international business literature) and international trade finance (international economics literature). We empirically test these hypotheses using survey data compiled from subsidiary managers in six ASEAN countries, supplemented with host-country level data. We conceptualise, empirically test, and establish that the subsidiary-level capability in combining and utilising internal and external debts is an important subsidiary-specific advantage to support export intensity. We find that subsidiaries employ intra-firm loans from MNE internal capital markets and, to some extent, bank loans from external financial institutions to boost their export intensity. Subsidiaries may have concerns about foreign exchange risks, but the use of appropriate foreign exchange risk management is positively associated with export intensity. We discuss the implications of our findings for theory and practice.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/71649
Identification Number/DOI	10.1016/j.ibusrev.2017.07.004
Refereed	Yes
Divisions	Henley Business School > International Business and Strategy
Publisher	Elsevier
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