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The Private Export Credit Insurance Effect on Trade

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  • Koen J. M. van der Veer

Abstract

type="main" xml:lang="en"> International trade relies on trade finance (credit or insurance) by financial institutions. Evidence on the link between trade finance and trade is scarce, however, because trade finance data are hard to come by. This article uses a unique bilateral data set on worldwide exports insured by a world's leading private trade credit insurer in the period from 1992 to 2006. Applying various trade models, I consistently find a positive and statistically significant effect of private export credit insurance on exports. The results suggest that the private export credit insurance effect on trade is larger than the value of exports insured.

Suggested Citation

  • Koen J. M. van der Veer, 2015. "The Private Export Credit Insurance Effect on Trade," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 82(3), pages 601-624, September.
    • Handle: RePEc:bla:jrinsu:v:82:y:2015:i:3:p:601-624
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    Cited by:

    1. Brandi, Clara & Schmitz, Birgit, 2015. "Trade flows in developing countries: what is the role of trade finance?," IDOS Discussion Papers 13/2015, German Institute of Development and Sustainability (IDOS).
    2. Niepmann, Friederike & Schmidt-Eisenlohr, Tim, 2017. "No guarantees, no trade: How banks affect export patterns," Journal of International Economics, Elsevier, vol. 108(C), pages 338-350.
    3. Christian Fischer‐Thöne, 2023. "Optimal Payment Contracts In Trade Relationships," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(4), pages 1649-1683, November.
    4. Martin, Elliot PhD & Shaheen, Susan PhD & Stocker, Adam, 2021. "Impacts of Transportation Network Companies on Vehicle Miles Traveled, Greenhouse Gas Emissions, and Travel Behavior Analysis from the Washington D.C., Los Angeles, and San Francisco Markets," Institute of Transportation Studies, Research Reports, Working Papers, Proceedings qt90b6d7r3, Institute of Transportation Studies, UC Berkeley.
    5. Fischer, Christian, 2020. "Optimal payment contracts in trade relationships," DICE Discussion Papers 332, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    6. Olena SOKOLOVSKA, 2017. "Trade Credit Insurance: Theoretical Background And International Practices," Scientific Annals of Economics and Business (continues Analele Stiintifice), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 64(1), pages 123-137, March.
    7. Luca Alfieri, 2018. "Heterogeneity Of Financial Institutions In The Process Of Economic And Monetary Integration In East Asia," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 112, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    8. Ben Jelili Riadh, 2020. "Do Default Loss Risks Matter for Arab Exports? Evidence from a Gravity Modelling Approach," Review of Middle East Economics and Finance, De Gruyter, vol. 16(3), pages 1-22, December.
    9. Malakauskienė Karolina & Lakštutienė Aušrinė & Witkowska Justyna, 2022. "Factors Influencing Non-Life Insurance Demand: Case of Lithuania," Management Theory and Studies for Rural Business and Infrastructure Development, Sciendo, vol. 44(3), pages 244-253, September.
    10. Sokolovska Olena, 2017. "Trade Credit Insurance and Asymmetric Information Problem," Scientific Annals of Economics and Business, Sciendo, vol. 64(1), pages 123-137, March.
    11. Steven Poelhekke, 2016. "Financial Globalization and Foreign Direct Investment," Tinbergen Institute Discussion Papers 16-098/VIII, Tinbergen Institute.
    12. Natasha Agarwal & Zheng Wang, 2018. "Does the US EXIM Bank really promote US exports?," The World Economy, Wiley Blackwell, vol. 41(5), pages 1378-1414, May.
    13. S. Alex Yang & Nitin Bakshi & Christopher J. Chen, 2021. "Trade Credit Insurance: Operational Value and Contract Choice," Management Science, INFORMS, vol. 67(2), pages 875-891, February.
    14. Duc Bao Nguyen & Anne‐Gaël Vaubourg, 2021. "Financial intermediation, trade agreements and international trade," The World Economy, Wiley Blackwell, vol. 44(3), pages 788-817, March.
    15. Dirk H M Akkermans, 2017. "Net profit flow per country from 1980 to 2009: The long-term effects of foreign direct investment," PLOS ONE, Public Library of Science, vol. 12(6), pages 1-28, June.
    16. Vafadarnikjoo, Amin & Chalvatzis, Konstantinos & Botelho, Tiago & Bamford, David, 2023. "A stratified decision-making model for long-term planning: Application in flood risk management in Scotland," Omega, Elsevier, vol. 116(C).
    17. Castellares, Renzo & Salas, Jorge, 2019. "Contractual imperfections and the impact of crises on trade: Evidence from industry-level data," Journal of International Economics, Elsevier, vol. 116(C), pages 33-49.
    18. Mathias Bärtl & Simone Krummaker, 2020. "Prediction of Claims in Export Credit Finance: A Comparison of Four Machine Learning Techniques," Risks, MDPI, vol. 8(1), pages 1-27, March.
    19. Thomas Url, 2016. "Gesamtwirtschaftliche Auswirkungen der Exportgarantien in Österreich," WIFO Studies, WIFO, number 58839, February.
    20. Agarwal, Natasha & Chan, Jackie M.L. & Lodefalk, Magnus & Tang, Aili & Tano, Sofia & Wang, Zheng, 2023. "Mitigating information frictions in trade: Evidence from export credit guarantees," Journal of International Economics, Elsevier, vol. 145(C).
    21. Sokolovska, Olena, 2016. "Trade credit insurance: theoretical background and some international practices," MPRA Paper 74303, University Library of Munich, Germany, revised Aug 2016.
    22. Luca Alfieri, 2021. "Heterogeneity of financial institutions in the process of economic and monetary integration in East Asia," The World Economy, Wiley Blackwell, vol. 44(4), pages 1053-1076, April.

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