Export Credit Gurantees, Moral Hazard and Exports Quality
AbstractWe analyse the role played by Export Credit Guarantees (ECGs) to encourage 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.
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Bibliographic InfoPaper provided by Department of Economics, University of Kent in its series Studies in Economics with number 0402.
Date of creation: Jan 2004
Date of revision:
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Postal: Department of Economics, University of Kent at Canterbury, Canterbury, Kent, CT2 7NP
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Other versions of this item:
- María del Carmen García-Alonso & Paul Levine & Antonia Morga, 2004. "Export Credit Guarantees, Moral Hazard and Exports Quality," Bulletin of Economic Research, Wiley Blackwell, vol. 56(4), pages 311-327, October.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
- H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-04-04 (All new papers)
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