Trade finance matters: evidence from the COVID-19 crisis

Demir, Banu; Javorcik, Beata Smarzynska

doi:10.1093/oxrep/graa034

Cited by 26 publications

(15 citation statements)

References 22 publications

(18 reference statements)

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“…We provide empirical evidence to inform two debates: whether reliance on inputs from abroad and China in particular, caused more vulnerabilities and how social distancing measures affected global production and exports. Thereby, our paper adds to the studies of the impacts of COVID-19 on trade and GVCs (e.g., Bonadio et al 2021;Cerdeiro and Komaromi, 2020;Demir and Javorcik 2020;Espitia et al 2021;Socrates, 2020;Crozet et al 2021). Using cross-country-product-month level data, Berthou and Stumpner (2021) show that lockdown measures implemented by exporter and importer countries impacted trade.…”

Section: Introductionmentioning

confidence: 84%

How Resilient was Trade to COVID-19?

Bas¹,

Fernandes²,

Paunov³

2022

Policy Research Working Papers

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We examine the supply-side characteristics -unskilled labor, imported input intensity, dependence on inputs from China, production complexity -that determine different potential vulnerabilities of traded products to the COVID-19 pandemic. Relying on monthly exports at the product level by all countries to the United States, Japan, and all 27 European Union countries from January 2018 to December 2020, we estimate a difference-in-differences specification of the COVID-19 incidence (deaths per capita) mediated by product vulnerabilities. We account for the precise lag between when the COVID-19 shock hit the exporting country and when exports reach their destination country relying on the products' type of transportation and distance between exporter and importer countries. Higher reliance on foreign inputs, on China as input supplier, on unskilled labor and a lower degree of complexity negatively affected exports as a result of this shock.

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Section: Introductionmentioning

confidence: 84%

How Resilient was Trade to COVID-19?

Bas¹,

Fernandes²,

Paunov³

2022

Policy Research Working Papers

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“…Trade across international borders is riskier than trading within national borders. This is because shipping goods internationally involves dealing with trading partners who are located far away, speak a different language, and are subject to different laws and regulations (Demir and Javorcik 2020). An unexpected adverse economic shock, such as the current pandemic, increases the risks of non-payment or non-delivery of prepaid goods.…”

Section: Controlsmentioning

confidence: 99%

Does Better Access to Finance Help Firms Deal with the COVID-19 Pandemic? Evidence from Firm-Level Survey Data

Amin¹,

Viganola²

2021

Policy Research Working Papers

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The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

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“…In contrast, such exports were more resilient in the early stages of the pandemic because banks were not financially distressed and such financing was not in short supply. Securing letters of credit helped exporters cope with the heightened uncertainty by reducing their exposure to risk (Demir and Javorcik, 2020;Crozet et al, 2022).…”

Section: Related Literaturementioning

confidence: 99%