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Credit Support for Export: Econometric Evidence from the Czech Republic

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Abstract

The topic of this paper is quite a novel one - it is one of few empirical academic papers dealing with export credit. Moreover, it is the first analysis of this kind which focuses on transition economies. The paper deals with export credit promotion in the Czech Republic. The development and structure of Czech trade and export support is presented first, followed by an econometric analysis of the gravity model of Czech trade. A panel of 160 countries in 1996-2008 is analyzed and two gravity models of exports for the Czech Republic are estimated, the static model by fixed effects (LSDV estimator) and the dynamic model by System GMM. Due to ambiguous conclusions we assume that the behavior of our explanatory variables is not uniform and our data set behaves as a mixture of countries with heterogeneous behavior. This means that traditional techniques of estimation which include all observations into one model do not give significant results. Thus, we use robust techniques of estimation that solve the problem of heterogeneous patterns in data sets. Out of several possibilities we use the Least Trimmed Squares estimator (LTS) with a leverage point. We show that guarantees are a significant factor that influences positively the volume of exports in the Czech Republic. Moreover, there exist more variables that a effect the size of exports in the Czech Republic. Market forces described by GDP, distance, political risk or gross fix capital formation are significant in our econometric model. We find that higher GDP, shorter distance or lower political risk have a positive impact on Czech exports.

Suggested Citation

  • Karel Janda & Eva Michalíková & Jiøí Skuhrovec, 2012. "Credit Support for Export: Econometric Evidence from the Czech Republic," Working Papers IES 2012/12, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised May 2012.
  • Handle: RePEc:fau:wpaper:wp2012_12
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    File URL: http://ies.fsv.cuni.cz/default/file/download/id/20354
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    References listed on IDEAS

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    13. Karel Janda, 2009. "Bankruptcies With Soft Budget Constraint," Manchester School, University of Manchester, vol. 77(4), pages 430-460, July.
    14. Peter Egger & Thomas Url, 2006. "Public Export Credit Guarantees and Foreign Trade Structure: Evidence from Austria," The World Economy, Wiley Blackwell, vol. 29(4), pages 399-418, April.
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    Citations

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    Cited by:

    1. Martin Grančay & Nóra Grančay & Jana Drutarovská & Ladislav Mura, 2015. "Gravitačný model zahraničného obchodu českej a slovenskej republiky 1995-2012: ako sa zmenili determinanty obchodu?
      [Gravity Model of Trade of the Czech and Slovak Republics 1995-2012: How Have Det
      ," Politická ekonomie, University of Economics, Prague, vol. 2015(6), pages 759-777.
    2. Janda, Karel, 2014. "Czech Export Credit Agencies and their Market Power," MPRA Paper 54097, University Library of Munich, Germany.
    3. Karel Janda, 2014. "Export Credit Agencies in the Czech Republic and Their Market Power," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(3), pages 45-51, August.
    4. Gabriel Felbermayr & Inga Heiland & Erdal Yalcin, 2012. "Mitigating Liquidity Constraints: Public Export Credit Guarantees in Germany," CESifo Working Paper Series 3908, CESifo Group Munich.
    5. Predrag D. Radojevic & Darko Marjanovic & Tatjana Radovanov, 2014. "The Impact of Firms’ Characteristics on Export Barriers’ Perception: A Case of Serbian Exporters," Prague Economic Papers, University of Economics, Prague, pages 426-445.
    6. Michal Paulus & Eva Michalikova & Vladimir Benacek, 2014. "German International Trade: Interpreting Export Flows According to the Gravity Model," Working Papers IES 2014/19, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised May 2014.
    7. repec:prg:jnlpep:v:2015:y:2015:i:5:id:527:p:1-23 is not listed on IDEAS

    More about this item

    Keywords

    export; government promotion; gravity model; panel data;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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