Khóa luận tốt nghiệp Kinh doanh quốc tế: Cash-in-advance and export decision: evidence from cross-country firm-level data

Specifically he finds out that firms that are more affected by credit constraints are less likely to participate in export markets, and if they do, they export less.. They have only stud

1 Introduction

As we know, exporting sector is crucial to the nation’s economic health as well

as the Vietnam economy in particular An increase in exports implies business growth, greater profits, and more jobs Besides, there are also advantages such as Enhancing domestic competitiveness, reducing dependence on existing markets, gaining global market share and so on Making the export decision requires careful assessment of various factors One of them is the impact of the payment method on export decisions There is a wide range of payment methods used in international trade The selection of the payment method which depends on factors such as the relationship between exporters and importer, the ability of customers to meet regulations set by the commercial bank in terms of payment procedures and transaction fees, and the characteristics of goods, etc However, the favorable payment method for exporters also contains many risks for importers and vice versa When trading goods across borders, firms choose the different payment method The main decision is whether payment should be made before delivery (prepaid) or after delivery (postpaid) This is an important aspect of any commercial transaction as it determines whether the trading partner must complete the transaction and who takes the risk

Cash in advance (CIA) is one of the payment methods that affect a company's ability to export The CIA is a method that provides an alternative business funding source that export companies can use when there is a lack of collateral or credit ratings The CIA is a stipulation in some shipping agreements, requiring that an importer must pay the exporter in cash when contracts are signed or before the shipment is made Advance payment is a safe mode of payment for any business including export business Receiving an amount of sales in advance helps an exporter

in several ways to plan its financial activities smoothly From a buyer’s point of view, however, the advance payment contains risk, as the buyer advance payments before the dispatch of goods

With cash-in-advance payment terms, an exporter can avoid credit risk

addition, the CIA has some advantages for exporters like: It will be a relatively safe way to receive cash follow that exporters no need for collateral or credit because commercial loans can affect credit ratings in contrast with the CIA Exporter can have cash quickly without much paperwork, the process is very simple, quick procedures

so it helps solve term cash flow problems Small businesses encounter term cash flow problems that can cause major problems for the company The CIA can help small companies pay cash they need to solve cash flow problems to produce

compared to the ratios of normal commercial bank loans, it is clear that the CIA has the highest approval rate In general, the use of the CIA is much faster than traditional business loans If the company needs to replenish exports or attempt to have the expected sales cycle or to have large quantities of goods or raw materials to produce exports, without delay Most small and medium enterprises will benefit from an increase in the prepaid capability of importing companies The CIA can be a great solution for small businesses who do not have collateral or credit history to apply for

a loan or business credit limit In addition, Businesses can then use the money for their company's operations and increase export activity

Requiring payment in advance, however, is the least attractive option for some

of the buyers, because it creates unfavorable cash flow Foreign buyers are also concerned that the goods may not be sent if the payment is made in advance Thus, exporters who insist on this payment method as their sole manner of doing business may lose to competitors who offer more attractive payment terms In contrast to the prepaid method, importers prefer to use the open account method However, this method has some drawbacks such as importers do not accept goods or lose the ability

to make payments Exporters will have to pay the transportation cost and may sell them cheaply or re-export, which waste time and resources of exporters We will explain why prepayment contributes to an increase in the firm's decision to export

Hoefele, A., Schmidt ‐ Eisenlohr, T., & Yu, Z (2016) study the impact of payment methods including the prepayment method, open accounts and letters of credit to companies operating internationally They focus on the effects of international differences in legal and financial conditions on the payment contract choice for international and domestic trade There are several research articles related

to credit restrictions of companies like Manova (2013) only studies the credit impact

of companies affecting the export of that company Specifically he finds out that firms that are more affected by credit constraints are less likely to participate in export markets, and if they do, they export less The Muu ˆ ls (2008) model has the same implication - firms are more likely to be exporters if they are less credit constrained Buch et al (2009) research the impact of financial constraints on the decision to engage in foreign direct investment and on foreign affiliate sales As far as we know, there is no article that study the impact of prepaid on export activities of credit-constrained companies They have only study separately the impact of the CIA on the company's ability to export as well as the impact of credit constraints on the export decision of a company Therefore this thesis examines the remaining problem of the four papers on which a case study on the prepaid case affects the company's ability

to export in specifically and how the prepaid effect on the export decision of credit- constrained companies?

This thesis considers whether the CIA has a significant impact on the export decisions of exporting companies, especially for small companies that have several credit constraints We argue that international transactions are inherently subject to more uncertainty than domestic transactions and that the CIA serves as a quality signal that helps reduce this high uncertainty In our analysis, we focus on the CIA financing to this purpose which we develop a model to determine the driving of factors of the export decision with a focus on the CIA on companies by the scale and

by the extent of its credit constraint More specifically, this thesis has four research questions:

How does the effect of the CIA on export decisions depend on transnational level data especially for developing countries?

firm-Does prepayment affect the export of small companies?

Is the impact of CIA stronger for companies that have severe credit constraint? Does the CIA contribute to increasing export capacity for companies in Vietnam?

This thesis provides evidence of prepaid payments that the firm receives from

a large number of countries, suggesting that firm characteristics are a central determinant As predicted by the theory prepaid payment transactions are more likely

to be implemented in developing countries We extend the original theory and use firm-level cross-country data from 2006-2010 and probit method to estimate an additional prediction about the effect of the CIA to the company's export With the probit method we use a model that shows the impact of the firm's export decision through 6 variables to measure such as CIA variables, Size, Foreign, etc More specifically, we show that in small companies and especially credit-constrained companies more CIAs will be used than medium-sized companies and companies with less credit constraints The key finding is that the CIA fosters export participation of small firms only We find that cash-in-advance has a positive effect

on the small firms' probability to export This result is particularly strong for severer credit-constrained firms One possible explanation is that CIA does help small firms export by ameliorating credit constraints while it plays no role in large firms Moreover, cash-in-advance relaxes the credit constraint facing small firms in domestic markets while medium firms rely on alternative forms of credit However, the CIA plays no role in determining the export participation in Vietnam This also shows that Vietnamese firms use alternative methods such as access to bank loans, from other organization or borrow from their relatives and friends rather than using the CIA

The rest of the thesis is organized as follows:

In Section 2, Literature review we show three strands of literature which the thesis based on

In Section 3, we develop a model for businesses at the cross-country firm-level data level of factors affecting their ability to export

In Section 4, present our empirical results and evaluating models for companies in Vietnam

In Section 5,conclude

2 Literature review

Our paper is based on three strands of literature First, we rely on the large body of literature on trade credits Trade credit is part of a joint commodity and financial transaction in which a firm sells goods or services and simultaneously extends credit for the purchase to the customer Despite the importance of quantity, commercial credit has received very little attention in the literature of the financial economy In Lee and Stowe (1993), companies expand trade credit to ensure product quality for customers in their home countries Their research is to explain the cross-sectional variation in trade credit across firms and industries They had developed a model of the sale process in the intermediate goods market to explain the existence

of trade credit with various payment terms The paper shows that there exists a separating equilibrium where the size of the cash discount conveys information about product quality The driving forces of this equilibrium outcome are the risk divide efforts of the producer and buyer as well as information asymmetry about product quality The remaining document is based on a guarantee by the quality hypothesis that was developed by Long et al (1993) He supposes that although trade credit has long been play an important source of financing for associations, it is one of the least understood methods of doing business and trade credit can serve to distinguish high- and low-quality goods (and producers) Therefore, he focuses on the sellers' decision

to extend trade credit and develop a reduced form model reflecting supply and demand influence Empirical evidence of the quality that signals motivation for a small sample of the US and European companies were conducted by Klapper et al (2012) in a recent research paper They find that the longer payment times offered to buyers, the less reliable suppliers are In other words, buyers are offered longer payment times if they buy from less reliable suppliers In addition, suppliers offer prepaid discounts to less dependable buyers to minimize payment risks Although trade credit is actually more expensive than bank credit, it contributes to reducing uncertainty, therefore, access to commercial credit helps the less productive companies benefit more Biais and Gollier (1997) build up a model in which the company extends commercial credit to show their trust in the reputation of the company that it provides trade credit Their arguments require trading partners to take

advantage of bank-related information If the sellers intent to extend trade credit, and thus to bear the default risk of the buyer, it must be that it has good information about the latter On observing, the bank update positively its beliefs about the buyer, and therefore agree to lend In other words, trade credit enables the private information of the seller to be used in the lending relationship, and this additional information can alleviate credit rationing due to adverse selection Giannetti and colleagues (2011), find that trading partners do not have continuous information advantages He saw that large firms and especially firms with many suppliers also receive more trade credit for longer periods This again shows buyers' market power affecting the availability

of commercial credit Existing theories fail to interpret why suppliers provide trade credit to customers with bargaining power instead of offering (larger) price reduction Burkart and Ellingsen (2004) the ability to improve access to bank credit for companies through commercial credit financing They believe that trade credit tends

to be less diverted than cash This indicates that companies that receive trade credit are less likely to cause moral hazard and banks are willing to lend more credit to these companies Furthermore, we clearly consider international transactions that tend to aggravate information asymmetries and differ in the selection of financial regimes from domestic transactions Our model has demonstrated how trade credit can relieve asymmetric information issues related to foreign trading companions and thus elevate trade Moreover, the use of supplier credit is a major concern in trade credit documents

On the other hand, we relate to documents on trade credit financing in international trade Only recently, commercial credit documents are studying primarily international transactions and investigating the optimal choice of commercial credit Schmidt-Eisenlohr (2013), the choice of trade credit of companies are affected by the financial market characteristics and a contractual environment of both international and local markets Hoefele and his colleagues (2013) examine these predictions and seek empirical support that the financial expenses and the power

of contract implementation determine the selection of trade credit contracts for foreign transactions Ahn (2011) pointed out which part of the transaction should provide trade credit and found that it should be a trading partner that owns a larger

amount of collateral In addition, he gives an explanation of the decline in global trade during the financial crisis partly due to a lack of commercial finance Auboin and Engemann (2014) analyze the effect of trade credit on macro-level trade over the entire cycle through the use of Berne Union export credit insurance data They point out that export credit insurance has a positive impact, as an authorization for commercial credit, on trade, this does not change between crisis and non-crisis The role of banks in international trade is focused on research by Olsen (2011) He showed out that by issuing letters of credit, banks have overcome enforcement issues between sellers and buyers

Second, we build on the literature on the use of cash-in-advance in international trade The choice of the payment contract is sharply influent to some important aspects of international trade Because of the allocation financial and risk between countries by agreement, they determine how the financial and legal conditions of the source and destination countries affect trade costs This also identifies which financial industry of the country is largely based on and thus influences the direction in which financial shocks can be transmitted internationally

We can see the intuitive nature of the trade financial model The requirement for working capital financing and a potential commitment issue is necessary for any transaction in international trade because of the time gap between the manufacturer and the seller Payment before delivery (prepaid) is selected, the importer sponsors the transaction and a commitment issue arises toward the exporter In the theoretical model, a seller is connected to a buyer Both companies are neutral and buy one time Buyers will be made or left with an offer by the seller, specifying the price and quantity of goods sold and the time of payment If payment is required before delivery (prepaid), the importer must borrow money in his domestic financial market Because

of prepaid, there is a risk for the buyer that the seller does not deliver This is restrained by courts with the probability of being given exogenously reliant on the legal organizations in the source country Mateut and Zanchettin (2013) show that small vendors of differentiated goods and exporters of standardized goods use credit sales and advance payments as complimentary terms of payment Payment terms may help trading partners find a contractual solution to mutual informational asymmetries,

whereby advance payments signal customer creditworthiness whilst trade credit guarantees seller product quality

In the basic specification of the experimental section, we analyze the difference between local and international sales by using statistics about the company's export intensity and prepaid payments from a survey In particular, we study the strength of the company's exports with enforcement measures and financial costs to predict that the higher export intensity that the firms have, the more responsive to changes in levels it has on financial costs and contract performance compared to firms with a larger share of domestic revenue The experimental results are accurate as predicted by the theory That is, for foreign sales, the increase in pre-shipment payment usage and the reduction in post-delivery payment usage is due to better enforcement in the source country Higher financial costs in the source country indicate that more contracts for cash in advance and fewer contracts for pay after delivery terms

In Katharina's research, he pointed out that companies use multiple prepaid payments because it serves as a quality signal that reduces high uncertainty regarding international transactions In particular, prepaid payments conducted by foreign buyers to exporters can alleviate the disadvantage and moral hazard options Therefore, exports become more profitable to allow less productive companies to start exporting He uses survey data on German businesses from "Business Environment and Enterprise Performance Survey" to check the impact of prepaid payments on companies participating in export Endogenous accounting, we find that prepaid has a positive impact on the company's ability to export It has been shown that this impact is particularly strong for less productive companies Daripa and Nilsen (2011) illustrate that upstream suppliers will be optimally prepaid by stronger financial companies that may delay production later He proposed a simple theory of trade credit as a subsidy mitigating a negative externality to answer Why would a supplier of inputs provide short-term credit at zero interest to its customers? His theory also gives rise to comparisons between cases in which trade credit or prepayment is used, suggesting that trade credit (prepayment) is more likely to occur

few research papers on the role of prepaid in the optimal payment system for international trade (Ahn,2011; Schmidt-Eisenlohr,2013) Antras and Foley (forthcoming) show that when contracts are implemented weakly in importing countries, prepayment is preferred to credit transactions They supposed in cash in advance transactions, there is no risk that the importer will not pay because payment arrive before the shipment However, in such transactions exporters, might be tempted to shave the quality or otherwise reduce the value of the goods being shipped

In a similar paper, Eck et al pointed out that prepayment is a key role in importer's quality signal to reduce the high uncertainty inherent in foreign transactions

Third, we relate to the literature on the effect of financial constraint on the export decision One of the characteristics related to the company's export decision is whether the company is financially constrained or not Exporters' working capital requirements increase because companies need to have enough liquidity to pay the costs as well as constraints in the credit market and tend to take longer to complete

an export order and payment collection after delivery compared to domestic orders Economists are just beginning to incorporate these arguments in heterogeneous companies' theoretical models and to test the significance of these models in terms of econometrics with enterprise-level data Muu ˆ ls (2008) He used analytical methods such as descriptive statistics; the linear probability model with/without fixed firm effects, fixed-effects OL and have studied some important issues such as Firms more likely to be exporters if they have higher productivity levels and lower credit constraints Credit constraints important for extensive but not for intensive margin of trade in terms of destination Chaney (2013) and Manova (2013) introduced credit restrictions on the model of Melitz's heterogeneous and commercial companies (2003) to discuss the role of these restrictions on export decisions In the Chaney (2013) model, companies have to pay extra to access international markets and if they encounter liquidity restrictions to finance these costs, only companies with sufficient liquidity can be exported The Muu ls model (2008) implies that if companies are less credit constrained, they will be more likely to export Similar to the Manova model (2013), he uses measures of financial constraint is financial vulnerability measured

at sector level (average over the 1980–1999 period for the median U.S firm in each

sector) to point out companies that are more affected by credit restrictions will be less involved in the export market and if they do, they will export less By using firm fixed effects for firms active in more than one sector, he showed that Limited credit availability hinders firms’ trade flows (export sales, export product scope, the number

of export destinations)

By using an OLS Fixed-effects method, GMM IV system, the influence of credit restriction on the export company is also researched by Czech Republic Manole and Spatareanu (2010) He finds out that exporters less financially constrained; less constrained firms self-select into exporting, but exporting does not alleviate firms’ financial constraints Arndt et al (2012) used Establishment-level data; cross-section for 2004/2005, analyze them in Two-step Heckman selection model and conclude that self-reported financial constraints have no impact on firms ’internationalization decisions By using data from Census data for firms, 2001–2005 (average values over the years used), Egger and Kesina (2013) studies that credit-constrained firms are less likely to export and have lower shares of exports in total sales Finally, Kiendrebeogo and Minea (2012) used Un-balanced dashboard data of 2,387 manufacturing companies from the World Bank Enterprise Survey database, 2003 and showed that Financial constraints reduce export participation, and have a negative impact on the export intensity and the hazard rate of entry into exporting And finally the thesis based on the research paper of Caggese and Cunat (2013), he finds out that constrained firms less likely to export when financing constraints are instrumented Financial constraints do not affect the percentage of sales exported Financing constraints affect negatively the number of export destination regions

We can see that the other research papers only focus on the impact of payment methods (including prepayment), the impact of commercial credit and credit constraints on export capacity However, there is no link between these studies The impact of the CIA on the company's exports is researched by Eck, K., Engemann, M.,

& Schnitzer, M (2015) papers, but they focus on clarifying the impact of the CIA on less productive firms In this thesis, we will study How the impact of the CIA on firms' export capacity, especially for small firms and firms have several credit

constraints, followed by model application to businesses in Vietnam to see if the exportability of companies in Vietnam is affected by the CIA

3 Data and Model Specification

3.1 Data discussion

We use a cross-section data from World Bank Enterprise Survey for a period 2006-2009 It is an inclusive cross-country firm-level survey covering a broad set of developing countries In the survey, a firm was asked what percentage of its total annual sales of the last fiscal year was paid before, on, or after delivery We categorize payment before delivery as cash in advance

We adjust the data set to fix the purpose of our analysis First, we keep only data of manufacturing enterprises as this sector is in line with the standard trade theory Second, as the subjective and objective credit constraints matter, only a firm that reports both rationed credit and self-ration is kept That is, a firm provides adequate answers for questions related to whether a firm was rejected to bank loan application and which level of an obstacle of access to financing firm faces Third,

we also drop incomplete observations

Table 1 portrays the summary statistics of our final data set The data used for our benchmark model contains about 17444 observation of exporting firms from 75 countries

Both CIA shares and export decision take any values from zero to one There

is no strong clustering

Table 1: Descriptive statistics

Panel A: Summary statistics on firm characteristics

of the CIA by firms More specifically, firms are asked how many percentages of their sales in value terms were paid before delivery by their customers over the past

12 months The value of the export decision, CIA and foreign are given ranging from zero to one in our dataset The summary statistics suggest that there is a sizeable variation in both the log sales and the log size It fluctuates from 1 to 30 and 5 to 26, respectively Besides, we also control the effects on the CIA by including the age of the firm and the manager’s experience The average firm is about 5 years old, whereas the highest experienced manager is approximate for 4 years Both variables have a variance lower than log sale and log size

Panel B: Exporters versus non-exporters in the face of credit constraints

Severe obstacle, Medium size

Severe obstacle, Medium size Exporters Non-exporters Exporters Non-exporters Variable Obs Mean Obs Mean Obs Mean Obs Mean Share of

modest obstacle, Small size

modest obstacle, Medium size

modest obstacle, Medium size

Exporters Non-exporters Exporters Non-exporters

Variable Obs Mean Obs Mean Obs Mean Obs Mean

Overall, exporters tend to use the CIA more extensively than non-exporters in both small and medium size whether it is affected by more or fewer credit restrictions Specifically, in the same level of credit restriction such as a high credit limit, the percentage of small companies exporting received prepaid is 41.7% higher than that

of non-exporting companies nearly 13% Similarly, in the case of a low credit limit, the percentage of received prepaid of exporters and non- exporters is 38.6% and 26.7%, respectively However, this difference becomes more distinct when small firms face credit constraint The average share of the CIA received is very similar for both groups and only marginally higher for exporters Specifically, 41.7% for small companies with high credit limit while small companies with low credit limit are only 38.6% Aside from, the larger the number of observations, the smaller the percentage

of businesses receiving CIA Moreover, we find that within the same size quartile, relatively more exporters than non-exporters receive CIA payments Specifically, with the case of small observations, about 17.4 % of small exporters receive a positive share of their sales in advance, whereas only 15.4 % of small non-exporters obtain advance payment There are also other export characteristics reflected in the data set such as the age of the manager, have higher sales per worker (labor productivity), and rather tend to be foreign-owned

Firms faced with the severe obstacle by credit constraint tend to use the CIA more than a minor or modest obstacle It can be seen clearly for both exporters and non-exporters in each group For example, in small businesses exporting, the percentage of receiving the CIA of firms having credit severe obstacle is 0.03% higher than minor or modest obstacle firms

In conclusion, these figures demonstrate the important role of the CIA for international firms as well as firms faced with high credit constraint Our data also captures other common characteristics of exporters: exporters have higher ages and sales, managers have more experience, and firms are likely to be owned by foreign entities

Table 2: Number of observation by country

Afghanistan 88

Dominican

Chile 482 Kenya 246

Trinidad and

In table 2, the number of observation by countries are described While there is some

heterogeneity, no single country’s observations dominate the data set As mentioned above, we will observe 75 countries on how often they use the CIA

3.2 Model specification

The baseline model is specified as follows:

𝐸𝑥𝐷𝑖𝑡 = 𝛽0+ 𝛽1𝐶𝐼𝐴𝑖𝑡+ 𝛽2𝐿𝑛𝑆𝑎𝑙𝑒𝑖𝑡+ 𝛽3𝐿𝑛𝑆𝑖𝑧𝑒𝑖𝑡+ 𝛽4𝐹𝑜𝑟𝑒𝑖𝑔𝑛𝑖𝑡+ 𝛽5𝐿𝑛𝐴𝑔𝑒𝑖𝑡+

𝛽6𝐿𝑛𝑀𝑎𝑛𝑎𝑔𝑒𝑟𝑖𝑡+ 𝑣𝑐 + 𝑣𝑡 + 𝜀𝑖𝑡 (1)

Method: Probit method to estimate

Our model predictions have shown that the CIA facilitates exports due to alleviating asymmetric information problems However, this effect must be promoted through the increased export performance of the Small businesses because large businesses can export even without a CIA, because they have strong economic potential or are more accessible to bank loans The firm’s profits from exporting contingent on the financing options available to the firm, partial CIA versus pure bank financing, its own productivity level as well as other firm characteristics

The model shows how variables affect the company's ability to export of firm

i in year t This is reflected in 𝐸𝑥𝐷𝑖𝑡 variable It can receive 2 values corresponding

to the company's ability to export

{ 𝐸𝑥𝐷𝑖𝑡 = 0 (𝑛𝑜𝑛 − 𝑒𝑥𝑝𝑜𝑟𝑡 𝑐𝑜𝑚𝑝𝑎𝑛𝑦)𝐸𝑥𝐷𝑖𝑡 = 1 (𝑒𝑥𝑝𝑜𝑟𝑡 𝑐𝑜𝑚𝑝𝑎𝑛𝑦)The main prediction of the model is on the coefficients of six terms The first is an indicator 𝐶𝐼𝐴𝑖𝑡, it is a percentage firm receives prepayment in the total its sale or share of total sales received in advance and it equal to 1 if the firm receives a positive amount of the CIA and equal to 0 otherwise Since we do not want to lose all firms with a zero share of the CIA, we assign zero observations a value that is slightly lower than zero If the company receives prepayment, it increases trust in the partner as well

as increases the company's capital to produce exports

Secondly, we have 𝐿𝑛𝑆𝑎𝑙𝑒𝑖𝑡 variable, which is defined as the percentage share

of total sales received before delivery of products or services It also varies from 0 to

1 If the rate is higher, it also increases the company's export ability

Thirdly, 𝐸𝑥𝐷𝑖𝑡 also contingent on 𝐿𝑛𝑆𝑖𝑧𝑒𝑖𝑡 Size is defined through the number of full-time labor that the company has, in other words, it answers the

question: How many full-time employees does the company have? As the Enterprise survey conducted by World Bank, a company is considered a small company if it has fewer than 19 employees, a medium company if it has 20-99 employees and the other case, is the large company if it has more than 100 employees We anticipate that the company's ability to export increases if it’s a larger company or it has more employees

The next is the dummy variable 𝐹𝑜𝑟𝑒𝑖𝑔𝑛𝑖𝑡, it is expressed whether the company has foreign investment or not, in other words, is there a foreign element in the company? It will get value 1 if the answer is yes and 0 in the other case We expect that if the company has more foreign factors, the company's ability to export is higher

So 𝐹𝑜𝑟𝑒𝑖𝑔𝑛𝑖𝑡 and 𝐸𝑥𝐷𝑖𝑡 are directly proportional to each other

Finally, when it started to export, the number of years of establishment and management experience in this sector will be represented by variables 𝐿𝑛𝐴𝑔𝑒𝑖𝑡 and 𝐿𝑛𝑀𝑎𝑛𝑎𝑔𝑒𝑟𝑖𝑡, respectively In another word, two questions will be answered: When did the company start its establishment in this country? How many years of experience working in this field does the manager have? We can see that the firm has more years of an establishment or the more experience of the manager, the higher value export firm has We can see that companies with many years of operation or experienced managers will be able to export more than the other companies Because there will be cases where a start-up firm or manager starts to experience it so it will

be less than 1 year, so the log age and log firm will be determined by the actual number of years plus 1 Minetti and Zhu (2011) and control for reputation and size effects included the log of firms’ age (LogAge)

In short, we hope that these six variables are directly proportional to the company's ability to export and have the same signs as 𝐸𝑥𝐷𝑖𝑡