Mitigating Information Frictions in Trade: Evidence from Export Credit Guarantees

dc.contributor.authorAgarwal, Natasha
dc.contributor.authorChan, Jackie M.L.
dc.contributor.authorLodefalk, Magnus
dc.contributor.authorTang, Aili
dc.contributor.authorTano, Sofia
dc.contributor.authorWang, Zheng
dc.date.acceptance2023-10-25
dc.date.accessioned2023-10-24T09:24:49Z
dc.date.available2023-10-24T09:24:49Z
dc.date.issued2023-10-31
dc.descriptionThe file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.
dc.description.abstractInformation frictions make foreign trade risky. In particular, the risk of buyer default deters firms from selling abroad. To address this issue, many countries offer export credit guarantees to provide insurance to exporters. In this paper, we investigate the causal effects of guarantees by exploiting a quasi-natural experiment in Sweden and rich register data on guarantees, firms and trade. Estimates from a fuzzy regression discontinuity design show large positive effects on the probability of exporting and the value of exports to the destination for which the guarantees are issued. These results are robust to an alternative approach using a difference-in-differences matching estimator. Further findings suggest that guarantees impact firms heterogeneously and play an important role in resolving buyer default risk and easing liquidity constraints. Larger impacts are observed in non-OECD countries, on smaller, liquidity constrained exporters and for firms selling products that face a relatively high cost of buyer default.
dc.funderOther external funder (please detail below)
dc.funder.otherGrowth Analysis and the Torsten Söderberg Research Foundation
dc.identifier.citationAgarwal, N., Chan, J., Lodefalk, M., Tang, A., Tano, S., and Wang, Z. (2023) Mitigating Information Frictions in Trade: Evidence from Export Credit Guarantees. Journal of International Economics, 145, 103831
dc.identifier.doihttps://doi.org/10.1016/j.jinteco.2023.103831
dc.identifier.urihttps://hdl.handle.net/2086/23292
dc.language.isoen
dc.peerreviewedYes
dc.projectidE38/16
dc.publisherElsevier
dc.researchinstituteInstitute for Applied Economics and Social Value (IAESV)
dc.rightsAttribution-NonCommercial-NoDerivs 2.0 UK: England & Walesen
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/2.0/uk/
dc.subjectInternational Trade
dc.titleMitigating Information Frictions in Trade: Evidence from Export Credit Guarantees
dc.typeArticle

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