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Trade finance matters: Evidence from the COVID-19 crisis
Oxford Review of Economic Policy ; 36:S397-S408, 2020.
Article in English | Scopus | ID: covidwho-944384
ABSTRACT
This study documents a substantial decline in the exports of major trading nations taking place in March 2020. Accounting for product-specific seasonality and annual trends, the data suggest a drop by 38 per cent in France, about a quarter in Turkey and Germany, and 12 per cent in the US, relative to their historical averages. Detailed export data from Turkey, disaggregated by financing terms, show another striking pattern. Flows using bank intermediation which eliminates or reduces the risk of non-payment or non-arrival of prepaid goods, such as letters of credit or documentary collection, appear to have been much more resilient to the current downturn relative to flows using other financing terms. These findings suggest that access to trade finance is vital during times of heightened uncertainty. © The Author(s) 2020. Published by Oxford University Press. For permissions please e-mail journals.permissions@oup.com

Full text: Available Collection: Databases of international organizations Database: Scopus Language: English Journal: Oxford Review of Economic Policy Year: 2020 Document Type: Article

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Full text: Available Collection: Databases of international organizations Database: Scopus Language: English Journal: Oxford Review of Economic Policy Year: 2020 Document Type: Article