Most firms rely on external capital (as opposed to their own capital, internal cash flows and
reinvested earnings) to finance fixed costs—such as research and development, advertising,
fixed capital equipment—and also to finance intermediate input purchases, inventories,
payments to workers and other frequent costs before sales and payments of their output take
place. As explained by economists Davin Chor and Kalina Manova, export activities entail
extra upfront expenditures that may force firms to rely on external finance. 3 Extra money …