Export Credit Guarantees, Moral Hazard and Exports Quality
AbstractWe analyse the role played by export credit guarantees (ECGs) in encouraging exports to developing countries. The existence of moral hazard on the side of the firm is introduced. We show that the inability of the exporter's government to verify the actual quality of the product will limit its ability to encourage trade through ECGs, once the coverage provided goes beyond a certain threshold. This result provides a rationale behind the limited coverage on ECGs. Copyright Blackwell Publishers Ltd and the Board of Trustees of the Bulletin of Economic Research, 2004.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Bulletin of Economic Research.
Volume (Year): 56 (2004)
Issue (Month): 4 (October)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0307-3378
Other versions of this item:
- Maria del Carmen Garcia-Alonso & Paul Levine & Antonia Morga, 2004. "Export Credit Gurantees, Moral Hazard and Exports Quality," Studies in Economics 0402, Department of Economics, University of Kent.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
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