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What Drives Bank-Intermediated Trade Finance? Evidence from Cross-Country Analysis

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  • José María Serena Garralda

    (Bank for International Settlements)

  • Garima Vasishtha

    (International Monetary Fund)

Abstract

Several important policy questions raised by the drop in trade finance during the global financial crisis remain unsettled due to the lack of hard data on trade finance. This paper provides fresh empirical evidence on the determinants of bank-intermediated trade finance using a novel panel data set. Results indicate that trade finance is driven by demandside factors, such as a country's trade flows growth, and global import growth. In addition, trade finance is dependent on funding availability for domestic banks, as well as global financial conditions and dollar funding costs. These results are robust to different model specifications.

Suggested Citation

  • José María Serena Garralda & Garima Vasishtha, 2019. "What Drives Bank-Intermediated Trade Finance? Evidence from Cross-Country Analysis," International Journal of Central Banking, International Journal of Central Banking, vol. 15(3), pages 253-283, September.
    • Handle: RePEc:ijc:ijcjou:y:2019:q:3:a:7
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    Cited by:

    1. Valentina Bruno & Hyun Song Shin, 2019. "Dollar and Exports," BIS Working Papers 819, Bank for International Settlements.

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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F19 - International Economics - - Trade - - - Other

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