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Poultry in Motion: A Study of International Trade Finance Practices

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  • Pol Antràs
  • C. Fritz Foley

Abstract

This paper theoretically and empirically analyzes the financing terms that support international trade. The choice of trade finance terms balances the risk that an importer defaults on an exporter and the possibility that an exporter does not deliver goods as specified. Analysis of transaction-level data from a US exporter reveals that importers located in countries with weak enforcement of contracts typically finance transactions, but these firms are able to overcome the constraints of such environments if they can establish a relationship with the exporter. Furthermore, the manner in which trade is financed shapes the impact of crises.

Suggested Citation

  • Pol Antràs & C. Fritz Foley, 2015. "Poultry in Motion: A Study of International Trade Finance Practices," Journal of Political Economy, University of Chicago Press, vol. 123(4), pages 853-901.
  • Handle: RePEc:ucp:jpolec:doi:10.1086/681592
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    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • G0 - Financial Economics - - General
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law

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