This paper explores the relationship between financial constraints and firm participation in global value chains (GVC). We use a rich firm-level data belonging to the Indian manufacturing sector for the period 2001–2016. Controlling for endogeneity and sample selection bias, our empirical outcome reveals a negative impact of financial constraint on firm GVC participation. We also find that inter-firm trade credit fosters firm participation in GVCs. Our findings also highlight that firms dependent on external finance find it challenging to participate in GVCs. Further, sub-sample analysis shows a significant effect of financial constraints in the case of small firms. Finally, we find that firms that are relatively more financially constrained are more likely to become a part of GVC (GVC starters) during the study period. Our findings have strong policy implication on the lines of promoting GVC participation for Indian manufacturing firms and hence remains of interest for policymakers.

本文探讨了金融约束与企业参与全球价值链 (GVC) 之间的关系。我们使用了 2001 年至 2016 年期间属于印度制造业的丰富的公司级数据。控制内生性和样本选择偏差，我们的实证结果揭示了财务约束对公司全球价值链参与的负面影响。我们还发现，公司间贸易信贷促进了公司参与全球价值链。我们的研究结果还强调，依赖外部融资的公司发现参与全球价值链具有挑战性。此外，子样本分析显示财务约束对小企业的显着影响。最后，我们发现在研究期间，财务上相对受限的公司更有可能成为全球价值链的一部分（全球价值链启动者）。