Financial health, exports, and firm survival: Evidence from a panel of UK and French firms

We use a comprehensive firm level data set to assess the role of firm heterogeneity in the link between financial health and firm survival. The data are for the UK and France, two countries with di?fferent fi?nancial systems. First, we investigate the importance of ?firm heterogeneity for the ?finance - survival nexus. In particular, the question is whether fi?rms at diff?erent stages of export activity (starters, continuers, exiters) react di?fferently to changes in ?financial variables. Second, we use our data to conduct a cross country comparison. As concerns ?firm heterogeneity, we fi?nd signi?cant diff?erences in the association between financial variables and survival depending on whether a fi?rm is an export starter, exiter or continuer, compared to ?firms that never export. We also fi?nd that the relationship between fi?nance and survival diff?ers in the British and French sub-samples. The most important di?fference relates to fi?rms that are continuous exporters, which may be due to diff?erences in terms of ?firm-level characteristics and fi?nancial institutions.