Testing the trade credit and trade link: evidence from data on export credit insurance

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractTrade finance has received special attention during the financial crisis as one of the potential culprits for the great trade collapse. Several researchers have used micro level data to establish the link between trade finance and trade, especially so during the financial crisis, and have found diverting results. This paper analyses the effect of trade credit on trade on a macro level through a whole cycle. We employ Berne Union data on export credit insurance, the most extensive dataset on trade credits available at the moment, for the period of [2005][2006][2007][2008][2009][2010][2011]. Using an instrumentation strategy we can identify a significantly positive effect of insured trade credit, as a proxy for trade credits, on trade. The effect of insured trade credit on trade is very strong and remains stable over the cycle, not varying between crisis and noncrisis periods.

Public export credit insurance in the Netherlands: An input–output approach

“…Auboin and Engemann () investigate the impact of export credit insurance, both publicly and privately supplied, in a multilateral framework. They particularly focus on the issue of causality: does trade decline if the supply of credit insurance is limited or does the demand for credit insurance decrease if trade declines?…”

“…Their results return a coefficient of 0.66, suggesting that more than 30% of the insured exports would also have been generated without support from the public ECIF. Auboin and Engemann (2014) investigate the impact of export credit insurance, both publicly and privately supplied, in a multilateral framework. They particularly focus on the issue of causality: does trade decline if the supply of credit insurance is limited or does the demand for credit insurance decrease if trade declines?…”

Trade Credit Insurance and Asymmetric Information Problem

“…The regression model allowed them to conclude about evidence of asymmetric information in this market. Auboin and Engemann (2014) examined the impact of trade credit on trade on a macro level. They used data on trade credits for the period from 2005 to 2011.…”

Introduction to the Special Section: Policy Instruments for Innovation, Investment and Global Trade

“…International trade is also strongly connected with a well-developed and functioning financial environment including trade credit (Auboin and Engemann, 2014). This is not only related to a reduction of government intervention and an application of a liberal trade regime.…”