Abstract: Based on the new-new trade theory and panel data from China’s industrial enterprises during 1998-2007, this paper adopts the Heckman two-stage selection model to test the effect of liquidity constraints on the export behaviors of China’s enterprises. The results show that liquidity constraint is an important factor that affects the export decisions of China’s enterprises and the export volume of the export enterprises. Compared to the intensive margin of trade, the effect of liquidity constraints on the extensive margin of export enterprises is more significant. Meanwhile, further study indicates that the above-mentioned conclusion exists mainly within the private enterprises and the mixed-ownership firms; the export of both the state-owned or collectively-owned enterprises is not subject to the liquidity constraint.

Key words: liquidity constraint; business export; extensive margin; intensive margin