This paper assesses the importance of firms' financial resources that are necessary to overcome sunk entry costs associated with export. We propose a new methodology to identify \textit{a priori} constrained firms, exploiting a rich data-set on Italian firms' assets and liabilities. We provide...

This paper will assess the importance of internal firm resources in overcoming sunk entry costs associated with export. When firms are not able to raise additional external funds for investments, they are credit-constrained, and in such a case, new exporters have to rely on their internal...

We develop a heterogeneous-firms model with trade in goods, labor mobility and credit constraints due to moral hazard. Mitigating financial frictions reduces the incentive of mobile workers to migrate to one region such that an unequal distribution of industrial activity becomes less likely....