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Real Sector Propagation of the Recent Global Financial Crisis: An Integrative Report


  • Reza Y. Siregar
  • C.S. Lim, Vincent


This paper attempts to examine the real sector propagation of the recent global financial crisis in the SEACEN economies. The study is of particular interest as SEACEN economies are known for their trade-oriented nature. The paper shows that weak demand, particularly in traditional markets of SEACEN economies like the United States, Japan and European markets, has an adverse effect on exports. The study also indentifies the non- availability of trade financing as another potential channel to weakening of exports. This implies that during the time of crisis, particularly when external demand is at its weakest, the availability of trade finance is of vital important. In general, it is noted that ensuring the soundness of the overall financial system to create a conducive environment for the credit markets is a key feature that can contribute positively to the promotion of exports. The study also provides indication of policy stance towards making trade financing more accessible.

Suggested Citation

  • Reza Y. Siregar & C.S. Lim, Vincent, 2011. "Real Sector Propagation of the Recent Global Financial Crisis: An Integrative Report," Staff Papers, South East Asian Central Banks (SEACEN) Research and Training Centre, number sp83.
  • Handle: RePEc:sea:spaper:sp83

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    References listed on IDEAS

    1. Dell'Ariccia, Giovanni & Detragiache, Enrica & Rajan, Raghuram, 2008. "The real effect of banking crises," Journal of Financial Intermediation, Elsevier, vol. 17(1), pages 89-112, January.
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    3. Carmen M. Reinhart & Graciela L. Kaminsky, 1999. "The Twin Crises: The Causes of Banking and Balance-of-Payments Problems," American Economic Review, American Economic Association, vol. 89(3), pages 473-500, June.
    4. Dooley, Michael & Hutchison, Michael, 2009. "Transmission of the U.S. subprime crisis to emerging markets: Evidence on the decoupling-recoupling hypothesis," Journal of International Money and Finance, Elsevier, vol. 28(8), pages 1331-1349, December.
    5. Eduardo Borensztein & Ugo Panizza, 2010. "Do Sovereign Defaults Hurt Exporters?," Open Economies Review, Springer, vol. 21(3), pages 393-412, July.
    6. Reza Y Siregar & Keen Meng Choy, 2010. "Determinants of International Bank Lending from the Developed World to East Asia," IMF Staff Papers, Palgrave Macmillan, vol. 57(2), pages 484-516, June.
    7. J. Stephen Ferris, 1981. "A Transactions Theory of Trade Credit Use," The Quarterly Journal of Economics, Oxford University Press, vol. 96(2), pages 243-270.
    8. Xing, Yuqing, 2011. "Processing Trade, Exchange Rates, and the People’s Republic of China’s Bilateral Trade Balances," ADBI Working Papers 270, Asian Development Bank Institute.
    9. Smith, Janet Kiholm, 1987. " Trade Credit and Informational Asymmetry," Journal of Finance, American Finance Association, vol. 42(4), pages 863-872, September.
    10. Brennan, Michael J & Maksimovic, Vojislav & Zechner, Josef, 1988. " Vendor Financing," Journal of Finance, American Finance Association, vol. 43(5), pages 1127-1141, December.
    11. Raymond Fisman & Inessa Love, 2003. "Trade Credit, Financial Intermediary Development, and Industry Growth," Journal of Finance, American Finance Association, vol. 58(1), pages 353-374, February.
    12. Claudio Raddatz, 2010. "Credit Chains and Sectoral Comovement: Does the Use of Trade Credit Amplify Sectoral Shocks?," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 985-1003, November.
    13. Thomas William Dorsey & Mika Saito & Armine Khachatryan & Irena Asmundson & Ioana Niculcea, 2011. "Trade and Trade Finance in the 2008-09 Financial Crisis," IMF Working Papers 11/16, International Monetary Fund.
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