The Relationship Between Exports, Credit Risk And Credit Guarantees
This paper provides an understanding of how the export credit worthiness of an importing country affects export sales of agricultural and other manufactured products and how export credit guarantees or insurance can mitigate risks of non-payment. A theoretical model is developed. It shows how risk mitigation through export credit insurance could increase exports to high risk importing countries. The key result is that the export response curve is more inelastic in the presence of payment risk, and the effect of insurance is to make the export curve more elastic. Statistical evidence supports this fundamental premise.
|Date of creation:||2002|
|Date of revision:|
|Contact details of provider:|| Web page: http://fare.uoguelph.ca/|
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- Gerda Dewit, 1996.
"Export Insurance Subsidisation: Risk Coverage, Strategic Export Promotion or Aid?,"
9614, Business School - Economics, University of Glasgow.
- Gerda Dewit, 1996. "Export Insurance Subsidisation: Risk Coverage, Strategic Export Promotion or Aid?," Working Papers 9611, Business School - Economics, University of Glasgow.
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UCLA Economics Working Papers
040, UCLA Department of Economics.
- Howard D. Leathers, 2001. "Agricultural Export Subsidies as a Tool of Trade Strategy: Before and after the Federal Agricultural Improvement and Reform Act of 1996," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(1), pages 209-221.
- Grinols, Earl L, 1985. "Trade, Distortions, and Welfare under Uncertainty," Oxford Economic Papers, Oxford University Press, vol. 37(3), pages 362-74, September.
- Rude, James, 2000. "Reform of Agricultural Export Credit Programs," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 1(01).
- Brainard, William C. & Cooper, Richard N., 1968. "Uncertainty and Diversification in International Trade," Food Research Institute Studies, Stanford University, Food Research Institute, issue 03.
- Ruffin, Roy J., 1974. "International trade under uncertainty," Journal of International Economics, Elsevier, vol. 4(3), pages 243-259, August.
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