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.

Finance and International Trade: A Review of the Literature

“…The guarantee is provided by public export credit agencies or private insurers, such as Euler Hermes, Atradius or Coface, which are known as the "Big Three" (Van der Veer, 2010). As underlined by Auboin and Engemann (2012), trade credit insurance can be used in the case of OA or letters of credit. In the first case, the insurer compensates the exporter if the importer fails to pay while in the second one, the insurer protects the importer's and the exporter's banks against any default.…”

“…Because, by definition, trade insurance only applies to export activities, restricting the analysis to this specific form of trade finance allows us to address measurement issues. Auboin and Engemann (2012) employed data from Berne Union, which comprises private and public members representing approximately 10% of the world trade, for approximately 100 countries during the period 2005-2011. The authors demonstrate that insured trade credit extended for exports to a given country promotes imports in this country.…”

The Case for Regional Cooperation in Trade and Investment Finance for Asia

“…Another strand relies on Berne Union data on trade credit commitments by ECA. This literature has found a positive and significant impact of trade credit access on trade (Amiti and Weinstein, ; Auboin and Engemann, ). A third strand uses data provided by ECAs.…”

Kredili Satışlarda Kredi Riskinin Transferi Kredi Sigortasının Ekonomik Büyümeye Etkisinin İrdelenmesi Türkiye Örneği

“…Bu etkinin derecesi kriz dönemi veya kriz öncesi dönem farketmeksizin aynıdır. Bir ülkeye yapılan kredili ve açık hesap ticaretteki % 1 'lik artış, satış yapılan o ülkenin reel ithalatında % 0.4'lük bir artışa sebep olmaktadır(Auboin & Engemann, 2014). Benzer bir çalışma özel sektör kuruluşlarının düzenlediği ihracat kredi sigortasının ticaret hacmi üzerindeki etkisini göstermek amacıyla Van der Veer tarafından yapılmıştır.…”