The Impact of Bank Finance on SME Export Activities: Updated Empirical Insights
##plugins.themes.EpsilonTheme.article.main##
Denny Saputera*
Neneng Susanti
Sakina Ichsani
External capital is a vital resource for businesses seeking to enter international trade, with smaller firms being particularly dependent on it. Yet financial obstacles frequently prevent many SMEs from successfully breaking into export activities. This study investigates the impact of bank finance on SMEs’ export participation using firm-level data and empirical econometric analysis. The analysis employs descriptive statistics, correlation analysis, and regression estimation to assess the relationship between bank financing and export activities while controlling for firm-specific characteristics such as firm age, output, profitability, firm size, and human capital. The empirical results indicate a positive and statistically significant effect of bank finance on SMEs’ export participation. Firms with greater access to bank financing are better equipped to overcome financial barriers related to export activities, including production expansion, compliance with international standards, and logistics costs. Furthermore, firm output and firm size are found to positively influence export engagement, suggesting that productive capacity and scale are significant determinants of international market entry. These findings underscore the critical role of financial institutions in supporting SME internationalization. The study contributes to the literature on finance and international trade by addressing empirical evidence on how improved access to finance can facilitate international market entry for SMEs. Bank finance can enhance SMEs’ export performance and competitiveness in global markets.
Abor, J. Y., Agbloyor, E. K., & Kuipo, R. (2014). Bank finance and export activities of Small and Medium Enterprises. Review of Development Finance, 4(2), 97–103. https://doi.org/10.1016/j.rdf.2014.05.004
Amiti, M., & Weinstein, D. E. (2011). Exports and Financial Shocks. The Quarterly Journal of Economics, 126(4), 1841–1877. https://doi.org/10.1093/qje/qjr033
Beck, T., Demirgüç-Kunt, A., & Maksimovic, V. (2008). Financing patterns around the world: Are small firms different?☆. Journal of Financial Economics, 89(3), 467–487. https://doi.org/10.1016/j.jfineco.2007.10.005
Beck, T., Demirgüç-Kunt, A., & Martinez Peria, M. S. (2008). Banking Services for Everyone? Barriers to Bank Access and Use around the World. The World Bank Economic Review, 22(3), 397–430. https://doi.org/10.1093/wber/lhn020
Casey, E., & O’Toole, C. M. (2014). Bank lending constraints, trade credit and alternative financing during the financial crisis: Evidence from European SMEs. Journal of Corporate Finance, 27, 173–193. https://doi.org/10.1016/j.jcorpfin.2014.05.001
Manova, K. (2012). Credit Constraints, Heterogeneous Firms, and International Trade. The Review of Economic Studies, 80(2), 711–744. https://doi.org/10.1093/restud/rds036
Melitz, M. J. (2003). The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity. Econometrica, 71(6), 1695–1725. https://doi.org/10.1111/1468-0262.00467
Minetti, R., & Zhu, S. C. (2011). Credit constraints and firm export: Microeconomic evidence from Italy. Journal of International Economics, 83(2), 109–125. https://doi.org/10.1016/j.jinteco.2010.12.004
Moenardy, D. F., Santoso, R. B., & Muttaqin, R. (2025). Analysis of the Indonesia–EFTA Comprehensive Economic Partnership Agreement (IE-CEPA) to Enhance Indonesia’s Export Market Access. Journal of Economic Equity, Finance, and Taxation, 1(4), 152–165. https://doi.org/10.70865/jeeft.v1i4.134
Nursini, N. (2020). Micro, small, and medium enterprises (MSMEs) and poverty reduction: empirical evidence from Indonesia. Development Studies Research, 7(1), 153–166. https://doi.org/10.1080/21665095.2020.1823238
Pramesti, H., Jaya, U. A., Albar, F. M., Chrisulianti, R., & Wulandari, D. (2025). Business Sustainability Strategy For MSMEs Through Digital Marketing Optimization And Product Innovation. Jurnal Ekonomi Kreatif Dan Manajemen Bisnis Digital, 3(4), 492–506. https://doi.org/10.55047/jekombital.v3i4.932
Rahardjo, K. A. (2023). Analysis Of Digital Marketing Implementation As A Strategy In Increasing Msme Product Sales: (Case Study Of Msme Syifa Bakery). Current Advanced Research On Sharia Finance And Economic Worldwide, 2(4), 534–540. https://doi.org/10.55047/cashflow.v2i4.769
Rusliana, N., Alisjahbana, A. S., Budiono, B., & Purnagunawan, R. M. (2023). Performance of small and medium enterprises in Indonesia impacted by financial accessibility. Jurnal Ekonomi Pembangunan: Kajian Masalah Ekonomi Dan Pembangunan, 24(2), 293–307. https://doi.org/10.23917/jep.v24i2.21703
Saifurrahman, A., & Kassim, S. H. (2024). Regulatory issues inhibiting the financial inclusion: a case study among Islamic banks and MSMEs in Indonesia. Qualitative Research in Financial Markets, 16(4), 589–617. https://doi.org/10.1108/qrfm-05-2022-0086
Shandy, B., Pane, D., Yuriza, F., Hasran, G., Krisna, F., Leony, D., Nabila, N., & Bahar, W. (2025). Indonesia’’s Accession to OECD. Understanding the Economic Implications. Center for Indonesian Policy Studies.
Tambunan, T. (2021). UMKM di Indonesia: Peran dan Tantangan dalam Pembangunan Ekonomi. Prenada Media.
Wagner, J. (2012). International trade and firm performance: a survey of empirical studies since 2006. Review of World Economics, 148(2), 235–267. https://doi.org/10.1007/s10290-011-0116-8
Wang, Y. (2016). What are the biggest obstacles to growth of SMEs in developing countries?–An empirical evidence from an enterprise survey. Borsa Istanbul Review, 16(3), 167–176. https://doi.org/10.1016/j.bir.2016.06.001
World Bank. (2019). World Development Report: The Changing Nature of Work. https://doi.org/10.1596/978-1-4648-1328-3
World Bank. (2020). Global Financial Development Report.
Yuliza, M., Desda, M. M., Elondri, E., Adriwilza, A., Nurhamzah, N., Endarwita, E., Yurasti, Y., Sari, R. W., Satriadi, S., Febianni, V., & Dini, D. (2025). Improving Community Economic Value Through Utilization of Oil Palm Leaf Midribs into Export Handicraft Products. Journal of Sustainable Community Service, 5(1), 24–30. https://doi.org/10.55047/jscs.v5i1.869
Yunus, E. N., & Ernawati, E. (2025). Awakening the giant within: turning SME’s survival strategy into improved performance. International Journal of Innovation Science, 17(2), 463–486. https://doi.org/10.1108/IJIS-06-2023-0125
