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The Role of Financial Factors in the Trade Collapse: A Skeptic's View

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Author Info

  • Andrei A. Levchenko

    (University of Michigan)

  • Logan T. Lewis

    (University of Michigan)

  • Linda L. Tesar

    (University of Michigan)

Abstract

This paper explores the role of financial factors in the 2008-9 collapse of U.S. imports and exports. Using highly disaggregated international trade data, we examine whether the cross-sectoral variation in how much imports or exports fell during this episode can be explained by financial variables. To do this, we employ a wide variety of possible indicators, such as standard measures of trade credit and external finance dependence, proxies for shipping lags at the sector level, and shares of intra-firm trade in each sector. Overall, there is very little evidence that financial factors played a role in the collapse of U.S. trade.

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File URL: http://www.fordschool.umich.edu/rsie/workingpapers/Papers601-625/r616.pdf
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Bibliographic Info

Paper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 616.

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Length: 13 pages
Date of creation: Aug 2010
Date of revision:
Handle: RePEc:mie:wpaper:616

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Postal: ANN ARBOR MICHIGAN 48109
Web page: http://www.fordschool.umich.edu/rsie/
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Related research

Keywords: 2008-2009 Crisis; International Trade; Financial Factors;

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References

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  1. Davin Chor & Kalina Manova, 2010. "Off the Cliff and Back? Credit Conditions and International Trade during the Global Financial Crisis," NBER Working Papers 16174, National Bureau of Economic Research, Inc.
  2. Andrei A. Levchenko & Logan Lewis & Linda L. Tesar, 2009. "The Collapse of International Trade During the 2008-2009 Crisis: In Search of the Smoking Gun," Working Papers 592, Research Seminar in International Economics, University of Michigan.
  3. Love, Inessa & Preve, Lorenzo A. & Sarria-Allende, Virginia, 2007. "Trade credit and bank credit: Evidence from recent financial crises," Journal of Financial Economics, Elsevier, vol. 83(2), pages 453-469, February.
  4. Mary Amiti & David E. Weinstein, 2009. "Exports and Financial Shocks," NBER Working Papers 15556, National Bureau of Economic Research, Inc.
  5. Iacovone, Leonardo & Zavacka, Veronika, 2009. "Banking crises and exports : lessons from the past," Policy Research Working Paper Series 5016, The World Bank.
  6. David L. Hummels & Georg Schaur, 2009. "Hedging Price Volatility Using Fast Transport," NBER Working Papers 15154, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Nicolas Berman & José de Sousa & Thierry Mayer & Philippe Martin, 2013. "Time to ship during Financial Crisis," Sciences Po publications 2013-14, Sciences Po.
  2. Nakhoda, Aadil, 2012. "The influence of industry financial composition on export flow: A case study of a developing financial market," MPRA Paper 43792, University Library of Munich, Germany.
  3. Mirabelle Muûls, 2012. "Exporters, Importers and Credit Constraints," CEP Discussion Papers dp1169, Centre for Economic Performance, LSE.
  4. Rudiger Ahrend & Antoine Goujard, 2012. "International Capital Mobility and Financial Fragility - Part 6. Are all Forms of Financial Integration Equally Risky in Times of Financial Turmoil?: Asset Price Contagion During the Global Financial ," OECD Economics Department Working Papers 969, OECD Publishing.

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