Trade Finance and Trade Flows: Panel Data Evidence From 10 Crises
- Topics:
- Import Export,
- World Bank
- Tags:
- Finance,
- Financial Accounting
- Source:
- International Monetary Fund
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Overview: This paper assesses the effect of constrained trade finance on trade flows in countries undergoing financial and balance of payments crises. Most of the countries that had a major crisis had a significant trade contraction, while trade-related finance declined sharply. To estimate the effect of constrained trade finance on trade flows, the paper estimates import and export volume equations including explicitly trade financing as an explanatory variable in addition to the usual variables such as relative prices and income. It concludes that constrained trade finance is a factor in explaining both export and import volumes in the short-run.
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Format: PDF | Size: 1,024KB | Date: Dec 2004 | Pages: 20




